News & market updates

Central government debt fell to 93.1% of GDP by September 2025, down from 96.1% at the start of the year. The rupee weakened (to ~302.6 by Sept and ~310 since) while domestic debt rose by Rs 391bn to Rs 18,701bn and foreign debt by Rs 545bn to Rs 10,974bn, expanding nominal debt by Rs 937bn.

Sri Lanka plans to cut power generation costs to 25 rupees a unit (from about 37 rupees) by mid-2025 through competitive bidding, targeting roughly a 32% reduction. However, severe rupee depreciation is prompting renewable investors to demand US dollar tariffs, which could undermine the plan.

Secondary bond market yields were mixed: belly (2029-2030) fell while the short end (2027-2028) rose, resulting in a flatter curve; weekly Treasury Bill auction offers Rs.100 billion (Rs.20bn 91-day, Rs.50bn 182-day, Rs.30bn 364-day). Money-market liquidity rose to Rs.175.21bn (SDFR deposits Rs.200.21bn), overnight rates around 8.0%, and USD/LKR traded near Rs.310.00.

Sri Lanka's rupee closed at 310.00/10 to the US dollar, down from 309.75/85, while short-end bond yields edged up and the rest of the curve remained steady. Analysts warned that central bank dollar purchases at this level could push the rupee lower and raise energy and food costs unless sterilized.

Sri Lanka's budget deficit will rise 1.4 percentage points to 6.5% of GDP in 2026 after an extra 500 billion rupees of Cyclone Ditwah relief and recovery spending. Capital expenditure is raised to 5.0% of GDP and authorities warned of rupee depreciation and exchange-rate policy concerns.

Sri Lanka's rupee opened weaker at 309.90/310.10 per USD while local bond yields edged lower on increased buying interest, with various government bonds quoted around 9.00%–10.55%. Rs.100,000 million T-bills will be auctioned on 7 Jan; ASPI up 0.36%.

Sri Lanka's workers' remittances hit a record $7.8 billion in 2025, up 19% YoY and about 8% above the 2016 high, with December estimated at $650–700m. Middle Eastern destinations were the largest source and 310,915 skilled/semi-skilled workers left in 2025 despite a 1.2% drop in departures.

Secondary Treasury bond trading opened with yields edging up but capped by buying—e.g., 01.06.26 at 8.45%, 01.05.27 at 8.95% and 01.11.33 around 10.50%; total secondary market volume was Rs.16.21bn. Money-market net liquidity surplus was Rs.135.80bn (Rs.149.20bn at SDFR 7.25%), call/repo ~8.03%-8.04%, and USD/LKR closed at 309.95/310.05.

Colombo market rose as the ASPI gained 0.66% (150.67 pts) to 23,014.75, with market value up Rs.58.89 billion and turnover ~Rs.5.8 billion. Top contributors included Commercial Bank, ACL Cables, Dipped Products, Carson Cumberbatch, LOLC and Sampath, and foreigners were net buyers (~Rs.87.8m).

Sri Lanka’s rupee closed at 309.95/310.05 to the US dollar, weaker than Friday’s 309.75/309.85, while government bond yields were slightly higher (e.g. 15.12.2026 ~8.50/60%, 01.11.2033 ~10.50/52%).

Sri Lanka's rupee depreciated 5.6% against the US dollar in 2025. Analysts say the move reflects a more flexible exchange rate, normalising import demand and external-debt outflows with the IMF warning the current account could widen by about $700m over the next 12 months.

Sri Lanka recorded around US$7.8bn in foreign remittances in 2025, the highest on record, with December estimated at about US$650–700m and surpassing 2017's US$7.16bn. Remittances have risen as the central bank ended the parallel exchange rate regime, returning flows to formal channels.

Secondary government bond yields closed broadly steady week‑on‑week with a late‑week recovery concentrated in 2028–2033 maturities; weekly T‑bill yields rose for a second consecutive week (91d 7.74%, 182d 8.27%, 364d 8.45%) and T‑bill auction subscription was 47.83%.

Rupee eased to 309.85/92 per USD on Monday while government bond yields were largely steady (e.g. 15.10.2028 ~9.15%, 01.11.2033 ~10.50%). Colombo ASPI rose 0.57% to 22,993.

Hatton National Bank (HNB.N0000) was named Sri Lanka’s 'Best Bank for 2025' by The Banker and 'Strongest Bank in Sri Lanka' by The Asian Banker; HNB reported profit after tax of Rs.31.5 billion for nine months (up 42% YoY) with a Tier I ratio of 16.74%. The bank cited accelerated digital transformation, a c. Rs.350 billion loan book increase and initiatives like a bank-led cashless bus payment rollout as drivers of its resilience.

Sri Lankan authorities pledged to enforce the law against tuk-tuk gangs using violence to intimidate PickMe and Uber drivers, warning the tactics threaten the island's tourism safety brand.

Foreign investors bought about US$3.07m of Sri Lanka government securities in the week to Jan 1, taking 2025 net inflows into rupee bonds to US$234.4m, with foreign holdings near a 26-month high and it being the 13th week of buying in the last 18, Central Bank data showed.

Sri Lanka's rupee closed weaker at 309.75/85 per US$ (from 309.45/60), while government bond yields were slightly lower — e.g. the 15.02.2028 bond at 9.00/05% and the 01.11.2033 bond at 10.45/55%.

Central Bank Governor Nandalal Weerasinghe said Sri Lanka's economy could exceed 5% growth in 2026 driven by reconstruction spending after Cyclone Ditwa, including an extra Rs 500 billion on top of about Rs 1.4 trillion in public investments. He warned the stimulus could raise inflation and strain foreign exchange reserves unless offset by higher exports, remittances, tourism and external financing.

Sri Lanka's rupee weakened to 309.75/85 per USD from 309.45/60, while government bond yields edged lower as yields continued recovering for a second day. On the Colombo Stock Exchange, the ASPI rose 0.81% to 22,806 and the S&P SL20 gained 0.52% to 6,189.

Sri Lanka's current forex inflows from exports, remittances and gross services exceeded imports by US$504mn in November 2025. Total gross current inflows were US$2,282mn; exports US$1,047mn, remittances US$673mn, services US$560mn (tourism US$251mn), while intermediate imports fell to US$952mn and apparel inputs to US$203.2mn.

Secondary Treasury bond yields fell on the belly of the curve (2028–2032), with key tenors trading between 9.15%–10.40% and total secondary Treasury turnover of Rs.26.40bn on 31 Dec. Net liquidity surplus was Rs.128.14bn at the Central Bank SDFR (7.25%), call/repo averaged 8.04%/8.05%, and USD/LKR spot closed at 309.45/309.60.

Sri Lanka Customs collected Rs2,551bn in 2025, exceeding a revised target of Rs2,241bn, though December collections missed the monthly estimate (Rs276.7bn vs estimate Rs331bn). Officials cite stronger enforcement, improved valuation, rebounding imports (notably vehicles) and rupee depreciation as drivers, making Customs a top Treasury revenue source under the IMF program.

Sri Lanka's rupee closed at 309.45/60 per US$, essentially flat from 309.50/60, while government bond yields mostly fell (for example, the 15.02.2028 bond moved to 9.00/10%). Yields on several other maturities declined, though the 01.10.2032 issue rose slightly to 10.32/40%.

Sri Lanka posted an $82m current account surplus in Nov 2025 while the rupee fell to 308.03/dollar. Imports fell to $1,778m from $2,156.8m in October, and analysts warned that flaws in the flexible exchange-rate regime are driving rapid depreciation that could undermine public and state-enterprise finances.

The Sri Lankan rupee depreciated 5.6% against the US dollar in 2025, CBSL data show. It also weakened against other major currencies—16.3% vs the euro, 12% vs the pound and 9.6% vs the Chinese yuan.

Sri Lanka's rupee opened stronger at 309.25/70 to the US dollar (from 309.50/60 a day earlier); bond yields were broadly steady, with a 01.05.2028 bond quoted at 9.15/20% and bill and bond yields having risen over the past week. The government has announced relief payments to be funded from a domestic buffer.

Weekly Treasury Bill auction saw weighted average yields rise for a second week: 91-day 7.74% (+19bp), 182-day 8.27% (+32bp), 364-day 8.45% (+26bp); Rs.57.39bn raised of Rs.120bn offered (47.83% subscription). Secondary bond trading was subdued and the rupee appreciated slightly to 309.50/309.80.

Sri Lanka's annual inflation was 2.1% in the 12 months to December 2025, with prices up 1.2% in December and food prices spiking; the rupee depreciated to about 309.5/USD by year-end amid large central bank dollar purchases and a deflationary policy stance.

Sri Lanka's rupee closed at 309.50/60 to the US dollar on Dec 31, recovering from 310.00/20 a day earlier, while Treasury bond yields rose across maturities. The currency has weakened from about 293.25/75 last year amid exchange rate policy shifts and the government has announced relief payments funded from a domestic buffer.