News & market updates

BOI chairman Arjuna Herath said Sri Lanka will introduce competitive, IMF-aligned, rule-based tax concessions for Strategic Development Projects, granting SDP concessions to projects over US$50 million and ending long tax holidays and tax-free executive salaries.

Sri Lanka's rupee closed weaker at 303.40/50 per US dollar on Wednesday (from 303.05/15), while government bond yields were broadly steady. Examples: the 15.12.2026 bond at 8.30/35% (up slightly) and the 15.12.2032 bond flat at 10.50/65%.

Sri Lanka's rupee weakened to 303.20/25 per US$ and bond yields were broadly steady with small upticks on several maturities; a 70,000 million rupee Treasury bill auction was ongoing.

Health Minister Nalinda Jayatissa said the ministry has ordered 90 billion rupees of medicines from the State Pharmaceutical Corporation and will allocate a further 20 billion rupees — a 230% rise — to avert drug shortages. Cabinet approval was also given for 46.7 billion rupees of local purchases and total medical supplies spending is 183 billion.

Secondary bond yields were steady ahead of today's Rs.70 billion T-bill auction (Rs.10bn 91-day, Rs.40bn 182-day, Rs.20bn 364-day). Trades showed yields near 8.39%, 8.83% and 10.55% on some bonds, overnight liquidity was Rs.120.11bn and USD/LKR closed at 303.15/303.25.

Sri Lanka's rupee closed weaker at 303.05/15 to the US dollar versus 302.90/95 on Friday; government bond yields were broadly steady with small moves across maturities, and Rs.70,000 million of Treasury bills are to be auctioned on 22 October.

Sri Lanka Customs collected Rs 1,906 billion by Oct 20, achieving over 90% of its Rs 2,115 billion 2025 revenue target. The rise is attributed to stronger enforcement, improved valuation, a rebound in imports, rupee depreciation and digitisation of Customs processes.

DHL Express will raise shipping rates in Sri Lanka by 4.9% effective 1 January 2026. The company said the annual adjustment reflects inflation, currency dynamics and administrative/regulatory costs.

USD/LKR depreciated during the week to a fresh low of Rs.303.20, closing at Rs.302.90/00. Foreign holdings of LKR government Treasuries rose by Rs.9.43 billion to Rs.130.35 billion; primary market yields remained steady and money-market liquidity surplus fell to Rs.133.22 billion.

Sri Lanka's rupee opened weaker at 303.00/05 to the US dollar (from 302.90/95) while government bond yields were mostly steady with small moves across maturities. The ASPI rose 0.54% to 22,756 and Rs.70,000mn T-bills will be auctioned on Oct 22.

Banks reduced their holdings of Sri Lanka government bonds in July after months of trimming Treasury bill positions. The shift reflects low rates, recovering private credit and lower inflation that improved the budget, and analysts urge the Treasury to sell floating-rate bonds to cut interest-rate and rollover risk.

Foreign investors bought a net 9,428 million rupees (US$31.4m) of Sri Lankan government securities in the week to Oct 16, extending eight straight weeks of inflows that total 23,777 million rupees (US$79.3m); foreign holdings rose to 130.3 billion rupees, near their highest since Dec 2023.

Sri Lanka's rupee closed at 302.90/95 to the US dollar on Friday, slightly stronger from 303.00/10 after interventions around 303.18. Government bond yields were mixed — the 15.12.2026 bond ~8.30% (flat) while several longer-dated yields eased slightly.

Sri Lanka's rupee weakened to 303.15/25 per US dollar from 303.00/10, while government bond yields were broadly steady with 2026-2033 maturities quoted around 8.30%–10.75%; the ASPI was up 0.15% at 22,449.

The government launched a scheme to issue low-cost air tickets for Sri Lankan migrant workers, offering fares below prevailing market rates for all outbound workers traveling for employment. The initiative aims to support migrant workers who contribute to the economy through remittances.

USD/LKR traded above Rs.303, closing at Rs.303.00/10 on Oct 15 with $100.85m traded. Secondary Treasury yields were mostly unchanged (2027: 8.70–8.83%; 2029: 9.68–9.71%; 2030: 9.80%) and the overnight liquidity surplus was Rs.140.38bn.

Sri Lanka's rupee closed at 303.00/10 to the US dollar on Thursday, slightly weaker than the previous day. Government bond yields were broadly steady, with the 15.12.2026 bond at ~8.30/35% and the 15.09.2027 bond at 8.75/85% (slightly up).

Weighted average rates at the weekly Treasury Bill auction stayed steady at 7.52% (91-day), 7.89% (182-day) and 8.02% (364-day) while subscription fell to 35.11% of the offer. Secondary bond yields traded between ~8.27%–10.22%, overnight liquidity surplus fell to Rs.156.38bn and USD/LKR closed at Rs.302.95/303.00 (Oct 14).

Sri Lanka's rupee opened flat at 302.95/303.00 to the US dollar and government bond yields were broadly steady (e.g., 15.12.2026 quoted around 8.30–8.35%), while the ASPI rose 0.40% to 22,381.

The IMF program keeps the central bank's ceiling on domestic assets (net credit to government) flat. Analysts warn that, with high excess liquidity, this could limit the bank's ability to retain bought foreign reserves and raise risks of renewed monetary debasement, inflation and rupee pressure.

Sri Lanka's rupee closed at 302.95/303.00 to the US dollar, slightly weaker than 302.80/90 the previous day, while government bond yields were broadly steady. Select yields: 15.12.2026 at 8.30/35%, 01.07.2028 at 9.25/35% and 15.12.2032 at 10.50/65%.

Sri Lanka's rupee weakened to 302.90/303.00 per US dollar while government bond yields were broadly steady and a 77,500 million rupee Treasury bill auction was ongoing. The ASPI rose 0.24% to 22,425.55.

IMF warns global growth will slow to 3.2% in 2025 and 3.1% in 2026 and says government debt is set to rise. The report urges fiscal consolidation, flags loose fiscal policy in many countries, and cites Sri Lanka's past default and renewed pressure for capital projects.

Cabinet approved the issuance of foreign currency–denominated bonds in the domestic market. A survey cited investor demand of about $100 million for short- to medium-term bonds with maturities of less than one year to three years.

Sri Lanka's cabinet approved selling foreign-currency (US dollar) bonds to the local market, with a survey indicating about $100m demand for tenors under 1–3 years. Officials said longer-term syndicated loans will be structured via mandated lead managers and banks' dollar savings may be used to help repay maturing debt.

Sri Lanka's rupee closed weaker at 302.80/90 per US dollar (from 302.59/62), while government bond yields were broadly steady — e.g., the 15.12.2026 bond at about 8.28-8.33% and the 15.12.2032 bond near 10.50-10.62%.

RBI approved regulatory changes allowing Indian banks and their foreign branches to extend loans in Indian rupees to borrowers (individuals and institutions) in Sri Lanka, Bhutan and Nepal.

Moody’s completed its periodic review of Sri Lanka on 2 October 2025, issuing a report that did not announce a rating action and described the sovereign’s Caa1 foreign-currency rating with a stable outlook while noting growth momentum and fiscal consolidation. The report highlighted 4.8% real GDP growth in H1 2025, expected ~4.5% for 2025, 26.5% y/y revenue growth in the first seven months and an anticipated fiscal deficit narrowing to about 6.0–6.5% of GDP.

Sri Lanka's rupee opened at 302.60/70 to the US dollar, slightly weaker than the prior 302.59/62, while government bond yields were broadly steady (e.g. 2028 ~9.05–9.15%, 2029s ~9.60–9.73%, 2030 ~9.78–9.83%). The ASPI rose 0.29% and a 77,500 million rupee Treasury bill auction is scheduled for tomorrow.

Moody's reaffirmed Sri Lanka's Caa1 sovereign rating with a stable outlook, warning of a narrow revenue base and heavy reliance on external funding while forecasting growth to ease to about 4.5% in 2025 and a fiscal deficit of 6–6.5% of GDP with a primary surplus.