News & market updates

People's Bank's Kalpitiya branch made the first disbursement under a government-backed Disaster Relief Fund working-capital loan scheme—up to Rs.1 million at a concessional 3% rate—to help an MSME resume operations after Cyclone Ditwah.

Sri Lanka’s Treasury said it can manage debt service into early 2026 using $270m already from the ADB, $100m expected and a Rapid Finance Instrument, but if the IMF's $350m tranche is delayed it will buy dollars from the central bank. Analysts warned such central bank dollar sales and recent rate cuts have reduced banking liquidity and contributed to rupee depreciation.

Sri Lanka will pay about 3.275% plus possible surcharges on a $206m IMF Rapid Financing Instrument loan, which has a 3.25‑year grace period and is repayable within five years. The IMF said surcharges are level-based and the funds will go to the Treasury to support response efforts and catalyze further donor financing.

IMF Executive Board approved SDR150.5m (about $206m) in emergency RFI financing for Sri Lanka to address cyclone-related balance-of-payments and fiscal pressures; the EFF fifth review is deferred and discussions will resume in early 2026.

Banks agreed to grant distressed businesses 3–6 month extensions on existing loan repayments without additional interest or fees following Cyclone Ditwah. They also agreed on low-interest concessional loans, a common implementation mechanism and a shared database to coordinate support.

The Ceylon Federation of MSMEs has complained to the CBSL that banks kept lending rates elevated despite policy easing, noting AWPLR was 8.74% vs OPR 7.75% (peaked 29.67% vs policy 15.50%) and urging regulators to force repayment of excess interest and stronger action as bank profits rose in 2022–24.

Sri Lanka will co-host the 2026 Asian Regional Debt Management Conference at the end of May, approved by the Cabinet to strengthen the country's role in regional public debt management and international cooperation. The ADB-organised, four-to-five-day event will feature workshops on debt operations, risk mitigation and capacity-building.

Sri Lanka's rupee closed at 309.50/60 to the US dollar on Friday, slightly weaker than 309.40/55 the previous day after a week of depreciation; government bond yields were mostly higher, with the 15.03.2031 issue rising to 9.90/95% from 9.85/90%.

Sri Lanka sold Rs10,000 million of treasury bills on tap at an average rate of 7.91%, bringing total T-bill sales this week to Rs50.32 billion; settlement date is Dec 19.

Sri Lanka's central bank bought $90mn in November 2025 (net $74.3mn), contributing to the rupee's fall to about 307.8/USD. The bank has bought $1,625mn in 2025 while returning only $89.3mn YTD, creating liquidity that may pressure the exchange rate unless sterilized.

Sri Lanka's rupee strengthened slightly to 309.30/50 per US$ on Friday from 309.40/55 the previous day, while government bond yields edged up (e.g. the 15.09.2029 bond quoted at 9.47/52%). Colombo Stock Exchange indices rose, with the ASPI up 0.43% at 22,195.

Sampath Bank PLC will raise up to Rs.20 billion through a listed Basel III-compliant Tier II debenture programme over two years, launching with up to Rs.10 billion in the first phase. Debentures may be structured as Green/Sustainability Bonds, include non-viability conversion features, and are subject to approvals and market conditions.

Secondary bond market activity moderated as yields held broadly steady and total transacted Treasury volume was Rs. 30.64 billion on 17 December. Net liquidity surplus narrowed to Rs. 66.08 billion, overnight call/Repo at 7.97%/8.01%, and USD/LKR spot ~309.40/309.55.

Industries Minister Sunil Handunnetti told Parliament that 29,649 businesses have registered as Cyclone Ditwah-affected and damages for over 10,000 have been assessed. The government released Rs1bn, will pay Rs200,000 per reported business and offer 3% loans under an Rs80bn 2026 allocation.

Sampath Bank plans to issue up to 200 million debentures to raise Rs20bn, starting with up to 100 million in 5- and 7-year tranches. The Basel III-compliant instruments are Tier-2 unsecured subordinated debentures (and/or green/sustainability bonds) subject to shareholder and regulatory approvals.

Sri Lanka's rupee closed at 309.40/55 to the US dollar on Thursday, slightly stronger than the prior day but still down over the week; government bond yields were broadly steady (e.g. 15.12.2026 at 8.30–8.40%).

WealthTrust Securities (WLTH.N0000) raised Rs.500,837,708 by offering 71,548,244 shares at Rs.7 in an IPO that was oversubscribed and closed within minutes; the issue will list on the Diri Savi Board. Proceeds will strengthen core capital to meet phased minimum core capital increases and absorb market and interest-rate risks from its primary dealer operations.

Secondary Treasury bond yields declined, with shorter 2028 tenors rallying around ~8.95% and broader yields easing as the curve steepened. T-Bill rates held steady for a 22nd week (91d 7.51%, 182d 7.91%, 364d 8.03%) and the weekly auction was undersubscribed, raising Rs.40.629bn.

CBC Finance Ltd., a subsidiary of Commercial Bank of Ceylon PLC, raised Rs. 1.5 billion on 27 November 2025 via an oversubscribed issue of 15 million five-year listed unsecured subordinated debentures at a fixed 11.50% p.a. (rated "BBB+(lka)" by Fitch Ratings Lanka).

Sri Lanka's rupee weakened, opening at 309.75/80 per US dollar (from 309.65/72); bond yields were broadly steady (e.g. 15.02.2028 quoted at 8.90/97%). The ASPI was up 0.26% at 22,387.

Sri Lanka will breach the 13% of GDP primary spending limit in 2026 by seeking parliamentary approval for an extra Rs500 billion (about 1.4% of GDP) for cyclone relief, while maintaining the IMF debt target of 95% of GDP by 2032 and continuing to service foreign debt.

Sri Lanka's ASPI fell 0.17% to 22,292.57 (down 37.12 points) with turnover of 2.3 billion rupees. Yaden raised its stake in Maharaja Foods to 10.04%; HNB will list debentures offering 10.25% and 11% on Dec 19; HDFC appointed K B Wijeyratne as chairman pro-tem; United Motors set a 10-for-1 share split date; JKH, CTC, BUKI and DFCC were top gainers.

Sri Lanka will co-host the 2026 Asian Regional Debt Management Conference at the end of May, approved by the Cabinet to bolster its role in regional public debt management. The ADB-organised four- to five-day event will bring finance, central bank and debt office officials for workshops on debt operations and risk mitigation.

Capital Alliance PLC (CALT.N0000) was upgraded to A+ with a Stable outlook by Lanka Rating Agency, citing sustained profitability, robust capital adequacy and prudent risk and liquidity management; LRA also highlighted its leading role in the government securities market.

Sri Lanka's rupee weakened to 309.65/72 per US dollar on Wednesday while local government bond yields fell; the 15.12.2026 bond closed at 8.25/8.38% and the 15.09.2027 at 8.78/8.88%.

Sri Lanka sold Rs40.62bn of Treasury bills at auction with yields unchanged: 3-month 7.51% (Rs13.28bn sold of Rs10bn offered), 6-month 7.91% (Rs17.37bn sold of Rs25bn), 12-month 8.03% (Rs9.96bn sold of Rs13bn). Total bids received were Rs80.189bn.

Sri Lanka's 9-month real GDP for 2025 is estimated at 9,866 billion rupees, almost matching the 2021 level, while the central bank has maintained very low inflation and pursued deflationary policies to stabilise the rupee.

LOLC Finance (LOFC.N0000) listed and raised 15 billion rupees via 5-year rated, senior, unsecured debentures offered at par, carrying interest rates of 11.5% and 10.95%.

WealthTrust Securities (WLTH.N0000) IPO of 71,548,244 ordinary voting shares at LKR 7 (raising LKR 500,837,708) was oversubscribed within minutes and closed at 4:30 p.m.; it will list on the Diri Savi Board. Proceeds will strengthen core capital to absorb market and interest-rate risks ahead of phased minimum core capital increases from 1 Jan 2026 and 1 Jan 2027.

Sri Lanka's rupee traded at 309.55/65 per USD on Wednesday, slightly weaker than 309.50/60 the previous day, while government bond yields opened lower. A 48,000 million-rupee Treasury bill auction was underway and sovereign bonds were quoted around 8.98%–10.66%.