News & market updates

IMF Managing Director Kristalina Georgieva said Sri Lanka has made "tremendous progress" with macro stability restored, inflation sharply down and growth returning. She urged sustained reforms, stronger FX reserves and prudent fiscal policy, noted over $200m in IMF emergency aid and that debt restructuring is nearing completion.

Secondary bond market traded at prevailing levels with yields from 8.10% (01.08.26) up to 10.92% (15.08.39); a Rs.60 billion Treasury Bill auction (Rs.10bn 91-day, Rs.35bn 182-day, Rs.15bn 364-day) is on offer, below maturing volume of ~Rs.67.21bn. Money-market net liquidity surplus was Rs.270.41bn and USD/LKR closed around 309.40/309.50.

Pan Asia Banking Corporation (PABC.N0000) reported 2025 total assets of Rs. 308.02 billion and Profit After Tax of Rs. 4.01 billion (underlying PAT +35%). The bank delivered EPS of Rs. 9.05, 35% loan growth to Rs. 217.12 billion, deposits of Rs. 231.04 billion, improved asset quality (Stage 3 ratio 1.73%) and strong capital and liquidity metrics.

CBSL Governor Dr. Nandalal Weerasinghe said Sri Lanka's economic stabilisation is expected to continue, with inflation anchored at mid‑single‑digit levels and a low‑interest‑rate environment supportive of investment. He added that progress on external debt restructuring (including SriLankan Airlines) and rising remittances should strengthen the sovereign credit profile while the IMF program remains on track despite a delayed fifth review.

IMF Managing Director Kristalina Georgieva called Sri Lanka’s IMF programme a "success story" after meeting Central Bank Governor Nandalal Weerasinghe on 17 Feb, praising progress under the EFF, debt restructuring and macroeconomic stabilization while urging sustained reforms.

The Committee on Public Finance approved the Microfinance and Credit Regulatory Authority Bill on 10 Feb 2026 to establish a statutory Authority to license and regulate money-lending and microfinance providers (including online lenders), with powers to set maximum interest rates and protect customers.

The Committee on Public Finance approved the Microfinance and Credit Regulatory Authority Bill to create a statutory regulator to licence and oversee moneylenders and microfinance firms, including powers to set maximum interest rates and require online lending to be through licensed entities. The revised draft addresses prior constitutional issues, may exempt some lenders, and calls for stakeholder measures such as reduced fees for community institutions and a robust IT system with local delegat

Secondary bond market yields largely held steady on 13 Feb with selected tenors edging up and total secondary Treasury Bond/Bill traded volume at Rs. 25.81 billion. Net liquidity surplus was Rs. 270.99 billion, overnight rates around 7.67%-7.68%, and USD/LKR closed stable at 309.20/309.25.

Gross official reserves fell marginally to $6.82 billion at end-January, down 0.15% month-on-month. Gold reserves rose 26% to $109 million and 12-month short-term outflows are estimated at $3.92 billion.

CSE reports ASPI rose 269% from 6,129.21 in 2020 to 22,624.31 at end‑2025 (24.32% CAGR), with record ASPI, S&P SL20 and market cap above LKR 8.46bn in Jan 2026. The exchange cites 25 new 2025 listings, multiple new bond instruments (Blue, Green, Sharia, High Yield Social Sustainability, Orange) and plans to use infrastructure/municipal bonds to fund cyclone recovery and long‑term projects.

Foreign holdings of rupee Treasuries rose by Rs.9.21bn to top Rs.160bn, a near 36‑month high. Interbank liquidity hit Rs.299.68bn (an 11‑year high), T‑bill/T‑bond auction yields fell and secondary yields trended lower; USD/LKR closed around Rs.309.20.

The Central Bank released its February 2026 Monetary Policy Report, noting inflation turned positive in August 2025 and is projected to move towards the 5% target by H2-2026 while the Bank maintained an accommodative monetary policy stance. The report warns of global headwinds and cites strengthening domestic demand and core inflation stabilising around the target.

IMF Managing Director Kristalina Georgieva will visit Sri Lanka from Feb 16–18, 2026 to meet government officials, assess Cyclone Ditwah damage, and discuss IMF support for recovery and resilience efforts.

Gold rebounded to $4,953.18 per troy ounce on 13 Feb 2026, up 0.64%, recovering from a near one-week low as investors positioned ahead of key US inflation data that could shape interest rate expectations.

Public Debt Management Office raised the full Rs. 51 billion on offer across two maturities, issued at weighted average yields of 9.52% (01.03.30) and 10.73% (15.08.36) as secondary bond yields fell amid an elevated liquidity surplus of Rs. 296.71 billion. The USD/LKR closed around Rs. 309.30/309.37 and secondary bond turnover was Rs. 32.71 billion.

Treasury Secretary said Sri Lanka has agreements covering nearly 99% of external debt and has restructured over 92%, cutting public debt to about 105% of GDP and is expected to secure an additional $350m from the IMF after the fifth review. Cyclone Ditwah caused $4.1bn in damage (with $1.62bn needed in 2026) and recovery spending has been incorporated into the 2026 Budget without derailing fiscal consolidation.

Asian stocks hit a record high as stronger-than-expected U.S. jobs data lifted Treasury yields and reduced near-term Fed rate-cut odds; oil prices rose and the dollar firmed while the yen strengthened.

First Capital Holdings PLC reported Total Comprehensive Income of Rs. 3.23Bn for the nine months to 31 Dec 2025 (down from Rs. 4.53Bn a year earlier) and a Q3 Total Comprehensive Loss of Rs. 0.17Bn. Trading gains on government securities were Rs. 1.66Bn and Assets under Management fell to Rs. 96.4Bn.

Net money market liquidity surged to Rs. 296.45 billion, with a Rs. 90 billion T-bill auction fully subscribed and yields declining for the fourth straight week. Secondary bond yields fell ahead of a Rs. 51 billion Treasury Bond auction, while USD/LKR closed at 309.35/309.40.

First Capital Holdings reported Total Comprehensive Income of Rs.3.23 billion for the nine months ended 31 Dec 2025, down from Rs.4.53 billion a year earlier, and a Q3 Total Comprehensive Loss of Rs.0.17 billion after a Rs.0.41 billion dividend tax expense. Net income before operating expenses fell to Rs.6.33 billion (from Rs.7.69 billion), with trading gains on government securities of Rs.1.66 billion and stock brokering profit rising to Rs.166.3 million; AUM stood at Rs.96.4 billion.

Secondary bond market remained bullish as yields fell across the curve with strong demand in 2029–2037 tenors (long-end yields around 10.95%). A weekly T-bill auction offers Rs.90bn (Rs.20bn 91-day, Rs.50bn 182-day, Rs.20bn 364-day); net liquidity surplus Rs.282.22bn; USD/LKR ~309.40/309.45.

The Sri Lankan Government will hold an investor call tomorrow (11 Feb 2026) on Macro-Linked Bonds and Governance-Linked Bonds, presenting the 31 Dec 2025 Debt Report and updates on fiscal, macroeconomic and governance developments tied to the bonds' performance metrics.

Secondary bond market yields continued to trend lower, with robust activity and total secondary Treasury bond/bill volume of Rs.21.25 billion on 6 Feb; several belly-to-long maturities fell (e.g., 15.03.31 at 9.88%). Money-market liquidity surplus was Rs.278.20 billion and USD/LKR closed at 309.43/309.50.

Tokyo Cement reported 3Q turnover of Rs.14,523m (vs Rs.11,639m) and profit after tax of Rs.332m (vs Rs.1,006m), citing volume growth but lower selling prices, higher input and currency costs and capitalisation of expansion and a vessel; expects demand lift from reconstruction and infrastructure spending.

Tokyo Cement Group reported Q3 turnover of Rs.14,523 million (25% YoY) and PAT of Rs.332 million (down from Rs.1,006 million YoY), citing volume growth but pressure from lower selling prices, higher raw material and currency costs, and capitalisation of expansion and a vessel; expects demand support from post-cyclone reconstruction and planned government capex.

Asian stocks surged as Japan's Nikkei jumped 4.4% after PM Sanae Takaichi's decisive win and a strong rebound in U.S. chip stocks, supported by growing bets on U.S. rate cuts; commodities moved too with gold and silver up and oil slightly lower.

The Ceylon Federation of MSMEs called for binding reforms to Sri Lanka’s lending and regulatory framework, demanding banks refund excess interest collected between May 2022 and Nov 2024 and suspension of CRIB/NPL listings for shock-affected borrowers. It urged legislation, greater transparency in interest-rate benchmarks, and proposed tax credits to allow banks to recover refunds over five years.

Central Bank Governor Dr. P. Nandalal Weerasinghe said Sri Lanka does not need another debt restructuring, dismissing 2028 default fears. He presented projected external debt service payments for 2026–2032 (about US$2.537–3.556bn per year) and said reserves are building.

The CSE will launch a digital listing portal in 2026 and commit to a seven-day review timeline once requirements are met to accelerate IPOs; this push, aligned with the SEC roadmap and an expected accommodative monetary policy, aims to boost listings and market liquidity.

Sri Lanka ranked 100th in the Global Soft Power Index 2026 with a score of 33.8/100, down three places from 97th in 2025. Perceptions of ease of doing business improved alongside easing inflation and lower borrowing costs, while tourism indicators (visit appeal, food, friendliness) showed notable gains.