News & market updates

Rupee closed weaker at 309.35/50 per USD while government bond yields recovered and fell across the curve (e.g., 15.12.2026 at 8.45/50%, 15.03.2028 at 9.05/10%, 15.12.2029 at 9.70/72%). Dealers said several block trades were executed.

Fitch expects most Asia-Pacific banks to maintain broadly steady profitability in 2026 as regional rate-cut cycles near their end, with only modest net interest margin compression; Japan is an exception, where gradual monetary normalisation should lift NIMs and profitability.

Sri Lanka sold Rs9,000 million of Treasury bonds on tap at average yields set at this week's auction, bringing the week's total bond sales to Rs193.79 billion; 01 Mar 2030 sold at 9.74% and 01 Jun 2033 at 10.65%. Settlement date Jan 16.

World Bank says one in four developing economies are poorer than in 2019 and projects global growth to ease to 2.6% in 2026 (rising to 2.7% in 2027). The report warns of slower per-capita income growth in developing economies, lower inflation in 2026, and urges fiscal rules and investment in physical, digital and human capital.

Weekly Treasury Bill auction saw weighted average yields rise for a fourth consecutive week: 91-day 7.95% (+7bp), 182-day 8.44% (steady), 364-day 8.48% (+1bp). The auction raised Rs.96.43bn of Rs.100bn, the secondary bond market recovered and USD/LKR closed marginally weaker at 309.20/309.30.

Sri Lanka's rupee was quoted at 309.20/28 per USD, opening flat, while government bond yields were broadly steady: the 15.12.2028 bond at 9.30-9.40% and the 15.06.2035 bond at 11.20-11.25%. The ASPI rose 0.36% to 23,693 and USD telegraphic transfer rates were 305.60/312.60.

RDB Bank will prioritise SME and entrepreneur support in 2026 by expanding concessional direct loans, launching a digital Youth account, and introducing an RDB Speed Cash vehicle-backed quick loan from January 2026. The bank also set up Entrepreneurial Development and Business Revival units in 2025 and will add a dedicated '1985' customer hotline.

Sri Lanka's rupee closed at 309.20/30 per US dollar, weaker than 309.00/10 the previous day; government bond yields were broadly steady, with the 15.12.2026 note at 8.45–8.55% and the 15.03.2028 around 9.20–9.25%.

Treasury bill yields rose across most maturities at Tuesday’s auction: the 3-month yield jumped 7 bps to 8.95%, the 6-month was flat at 8.44%, and the 12-month rose 1 bp to 8.48%. All Rs 32bn of 3-month bills were sold; Rs 48bn were offered for 6-month (Rs 62.3bn sold) and Rs 20bn offered for 12-month (Rs 2.12bn sold).

Sri Lanka sold Rs184.79bn of 2030, 2033, 2035 and 2039 government bonds from a Rs205bn offer, at average yields of 9.74% (2030), 10.65% (2033), 11.08% (2035) and 11.09% (2039).

Sri Lanka's rupee opened weaker at 309.05/15 to the US dollar and short-tenor government bond yields edged higher across several maturities; a 100,000 million rupee Treasury bill auction was ongoing.

A Treasury bond auction raised Rs.184.79bn (90.14% of Rs.205bn) with mixed yields — short and long tenors in line with pre-auction levels while mid-tenors rose (01.03.30: 9.74%; 01.06.33: 10.65%; 15.06.35: 11.08%; 15.08.39: 11.09%). An Rs.100bn T‑bill auction is on offer today; net liquidity surplus was Rs.168.89bn and USD/LKR closed near 309.00.

Sri Lanka's rupee closed stronger at 309.00/10 vs 309.00/30 the previous day, while government bond yields rose—e.g. the 15-Dec-2026 bond at 8.45-8.55% and the 15-Sep-2029 bond at 9.60-9.65%.

Twelve private banks have applied to join Sri Lanka's 3% Ditwah cyclone relief loan scheme, which has Rs 10 billion allocated and MOUs expected by Jan 15. Loans carry a six-month grace period and three-year repayment for working capital; the central bank also allowed a six-month moratorium and penalty-free loan restructures.

Sri Lanka’s rupee opened weaker at 309.10/30 per USD; government bond yields were broadly steady (mid‑2029 ~9.50–9.70%, 2032 ~10.30–10.35%) and the ASPI rose 0.49% to 23,770.

Private sector bank credit rose to Rs. 262.6 billion in November 2025, taking outstanding private debt to Rs. 10 trillion. CBSL kept policy rates at 7.75% and ordered targeted debt relief and concessional credit after Cyclone Ditwah, while the government announced a 3% loan scheme for affected businesses.

The Ceylon Electricity Board has requested an 11% tariff increase from the regulator, citing a depreciated rupee (using 308.65/USD vs 303.33 previously) and higher local diesel and fuel costs despite falling global crude and coal prices.

Secondary bond yields closed lower week-on-week, led by sustained buying in the 2029–2030 maturities; a Rs.205 billion Treasury bond auction is scheduled for 12 January (settlement 16 Jan). Money-market liquidity rose to Rs.171.03 billion and USD/LKR closed around 309.00/309.30; weekly T-bill yields increased (91-day 7.88%, 364-day 8.47%).

People’s Bank will support MSMEs through government-backed and bank-funded loan schemes, offering interest rates of 7.0%–12.0% and products including working capital, term loans, trade finance, and solar/green power financing.

Private credit from commercial banks rose to a new monthly high of Rs262 billion in November 2025, taking total private credit to Rs10,029 billion and 12-month growth to 26%. Net bank credit to government fell and the rupee weakened to 308/USD, prompting concerns about the central bank's operating framework.

Sri Lanka's official worker remittances rose 43.2% to a record US$879.1m in December 2025, and full-year remittances reached US$8,076.2m. The rise is linked to ending the parallel exchange rate, central bank policy shifts and budget measures (housing loans, contributory pensions) to boost remittances.

The central bank bought US$250.8m in December 2025 and sold US$28.3m, contributing to roughly a three‑unit depreciation of the rupee to about 309.5–310. Analysts say these central-bank dollar purchases monetize reserves, conflict with domestic rate anchors, and risk higher energy/food prices and strain on state utilities.

Opposition Leader Sajith Premadasa accused the banking sector of resorting to 'debt traps', saying bank PAT rose from Rs.304 billion to Rs.467 billion between 2021 and 2022 and urging banks to support MSMEs. He said over 260,000 businesses collapsed in 2022, the Ceylon Federation of MSMEs may take legal action, and letters to the Central Bank will be tabled in Parliament.

Sri Lanka's rupee closed at 309.00/30 to the US dollar on Friday, slightly stronger than 309.10/50 the previous day; government bond yields were broadly steady, with the 15.12.2026 bond at about 8.45–8.50% and longer-dated yields around 9.2–10.6%.

Sri Lanka sold Rs10,000 million of treasury bills on tap at average rates of 7.88% (3-month) and 8.47% (12-month), bringing total bills sold this week to Rs110 billion; settlement date Jan 9.

Sri Lanka's rupee opened at 309.15/30 to the US dollar, relatively flat versus the previous day; government bond yields opened slightly higher (15.12.2029 ~9.64–9.67%, 01.07.2030 ~9.71–9.75%). The ASPI was up 0.37% at 23,614.

China's CPI rose to a 34-month high of 0.8% in December while full-year consumer prices were unchanged, even as the PPI fell 1.9% in December and 2.6% for the year, signaling weak demand. Authorities pledged continued support, including possible rate/RRR cuts and 62.5bn yuan in bond funds for a consumer trade-in scheme.

Central bank lending to banks rose to Rs48 billion on Jan 08 as state banks faced a severe cash crunch, raising liquidity concerns. Analysts warned the government's 'domestic buffer' withdrawals could strain interbank markets, prompt central bank accommodation and pressure interest rates, inflation and the rupee.

Central Bank Governor Nandalal Weerasinghe said Sri Lanka will face a 2026 AML/CFT/CPF Mutual Evaluation assessing FATF's 40 Recommendations and 11 Immediate Outcomes and warned an adverse result could trigger FATF grey listing, raising compliance costs and hurting growth and investor confidence. He said the FIU will lead national preparations and recent reforms have strengthened readiness.

Secondary Treasury bond yields fell amid strong buying and higher volumes; the Treasury announced a Rs.205 billion bond auction for 12 January. The rupee strengthened to Rs.309.10/309.50, net liquidity surplus was Rs.168.45 billion and secondary bond turnover was Rs.76.86 billion on 7 Jan.