News & market updates

IMF Executive Board will meet on Dec 19 to consider a $200m Rapid Finance Instrument loan to Sri Lanka after Cyclone Ditwah. The RFI is disbursed upfront; an IMF team is due in Jan 2026 to renegotiate program targets after an expected 500 billion rupee increase in 2026 spending and recent reserve pressures.

Secondary bond yields recovered after renewed buying, with 15.02.28 at 8.99%, 01.05.28 at 9.05% and 2029 tenors around 9.40%-9.49%. This came ahead of a Rs.48bn weekly T-Bill auction (Rs.10bn 91-day, Rs.25bn 182-day, Rs.13bn 364-day) and USD/LKR closed at Rs.309.50/309.60.

Sri Lanka's cabinet approved resumption of the Lower Malwathu Oya hydro project, with the estimated cost rising 106.02% from Rs22.9bn in July 2019 to Rs47.18bn in Dec 2025. The increase reflects about a 74% rupee depreciation and broader inflation and monetary policy effects.

Wealth Trust Securities Ltd (WTS) opens a Rs.500,837,708 IPO today, offering 71,548,244 ordinary voting shares at Rs.7 each for listing on the CSE Diri Savi Board; proceeds will bolster core capital and expand its government-securities trading capacity.

The SEC and CSE held investor forums in Galle, Badulla, Ratnapura, Gampaha, Kegalle and Kuliyapitiya, attracting over 800 participants to raise investor awareness and broaden capital market participation. Forums covered investor protection, how to invest (including unit trusts), sector analyses and included advisor recruitment drives.

Sri Lanka's rupee weakened to 309.50/60 per US dollar (from 309.25/35) while government bond yields were slightly down; selected closing yields: 15.12.2026 at 8.35/45%, 15.09.2027 at 8.80/90%, 15.09.2029 at 9.40/45%, 01.10.2032 at 10.22/25%, 01.11.2033 at 10.37/42%.

Commercial Bank of Ceylon’s unit CBC Finance listed Rs 1.5 billion of five-year debentures carrying a fixed 11.50% p.a. interest on the Colombo Stock Exchange. The 15 million debentures were priced at Rs100, rated BBB+(lka) by Fitch and the issue was oversubscribed.

CBC Finance Ltd, a subsidiary of Commercial Bank of Ceylon PLC, listed on the CSE and raised LKR 1.5bn on 27 Nov 2025 via 15m five-year listed subordinated redeemable debentures at a fixed 11.50% p.a. (rated BBB+(lka)).

WealthTrust Securities' IPO opens tomorrow offering 71,548,244 ordinary voting shares at LKR 7.00 to raise LKR 500,837,708 for listing on the CSE Diri Savi Board. Proceeds are intended to strengthen core capital and expand its government securities trading capacity.

Sri Lanka's rupee weakened to 309.45/50 per USD on Tuesday from 309.25/35, while government bond yields remained broadly steady. A 48,000 million rupee Treasury bill auction is scheduled for Dec 17 and the ASPI was up 0.15% at 22,328.

Secondary Treasury bond trading was subdued and yields consolidated after last week's rally, with the 01.06.26 at 8.30% and the 01.10.32 at 10.25%, and total secondary market Treasury volume of Rs.21.45bn on 12 Dec 2025. Net liquidity surplus fell to Rs.69.82bn, Rs.83.13bn was parked at the 7.25% SDFR, and USD/LKR closed at 309.25/309.35.

Sri Lanka will move a Rs500 billion supplementary estimate into next year’s budget to fund reconstruction after Cyclone Ditwah, which left over 800 dead or missing, damaged roads (RDA estimates Rs190bn) and destroyed 108,000 ha of paddy. The World Bank will repurpose $120m and the IMF has pledged $200m in fast-disbursing support.

The Cabinet approved Sri Lanka will co-host the 2026 Asian Regional Debt Management Conference at the end of May 2026. The ADB‑hosted event will bring debt managers, central banks and finance officials for workshops on public debt management, regional cooperation and capacity building.

Sri Lanka's Cabinet approved co-hosting the Asian Regional Debt Management Conference in late May 2026, a 4–5 day ADB‑hosted event. Officials from finance ministries, central banks and debt offices across ADB member countries will attend for knowledge sharing and capacity building in public debt management.

Central Bank of Sri Lanka held the International Research Symposium 2025 on 08–10 December, featuring the 14th IRC, the SAARCFINANCE Database Seminar and a CBSL‑ADB‑APAEA workshop focused on macroeconomic research. Governor N. Weerasinghe and international speakers emphasised research‑driven policy amid geo‑economic, climate and financial risks and the role of data/technology.

Bank of Ceylon received CSE in-principle approval to list up to Rs.20 billion of Basel III-compliant Tier II sustainability bonds, with an initial Rs.10 billion offer and two additional Rs.5 billion tranches. The five-year bonds (2025–2030) have Type A fixed coupon 10.50% and Type B at 12-month T-bill +2%; subscription opens 22 Dec to qualified investors.

Sri Lanka's GDP grew 5.4% in Q3 2025. Agriculture rose 3.6%, manufacturing 8.1% and services 3.5%, with insurance up 18%, financial services 13.2%, accommodation/food 9.3% and IT services 8.5%; central bank stability supported activity despite a weakening rupee.

The Sri Lankan rupee weakened to 309.25/35 per US dollar on Monday while government bond yields were largely steady (e.g., 15.12.2026 at 8.35/45%, 15.02.2028 at 8.97/9.00%, 15.06.2035 at 10.63/68%).

Sri Lanka sold Rs10 billion of Treasury bonds on tap at the auction-set rates, raising Rs3bn of the 01 Oct 2032 bond at a 10.29% yield and Rs7bn of the 15 Jun 2035 bond at a 10.67% yield, bringing the week's total sales to Rs130.87bn; settlement Dec 15.

Sri Lanka's budget deficit halved to 455.8 billion rupees in the 10 months to October 2025, while the rupee depreciated to 304/USD and tax revenues rose 34% to 4,033 billion rupees. Current spending produced a 112.4 billion rupee current surplus to October, but year-end deficits are still projected.

Sri Lanka's rupee traded around 309.00/25 to the USD as bond yields were broadly steady (near-term yields ~8.95–9.40%, longer bonds up to ~10.65%), while the ASPI rose 0.18%.

Sri Lanka's Jan–Oct 2025 budget deficit fell 57% YoY to Rs. 455.77 billion while the primary surplus rose 96% to Rs. 1.63 trillion. The government seeks supplementary estimates totalling Rs. 550 billion for post‑Ditwah relief and is pursuing additional IMF financing.

Private sector borrowings in October 2025 reached a record Rs. 246.10 billion, lifting outstanding private credit to Rs. 9.76 trillion, up 24.1% YoY. The CBSL kept the policy rate at 7.75% and announced targeted concessional credit and temporary debt-relief measures for borrowers affected by Cyclone Ditwah.

Secondary bond market turned bullish as yields fell across the curve after strong Treasury bond auctions, news of IMF engagement and a 25bp US rate cut. T-bill yields were unchanged (91/182/364-day at 7.51%, 7.91%, 8.03%); longer-dated bond maturities were fully subscribed while 01.03.2030 raised Rs.20.88bn at a 9.55% weighted yield.

Worker remittances rose 27% to USD 673.4mn in November 2025 and reached USD 7.2bn in the first 11 months, up 20.7% y/y and surpassing the 2017 record. The increase follows the central bank ending a parallel exchange rate regime and the 2026 budget pledge of housing loans and a pension scheme for overseas workers.

Private credit in Sri Lanka rose to a record Rs246.1 billion in October 2025 (from Rs236.3bn in September) while credit to government fell and the rupee depreciated. Analysts warn central bank shifts in reserve and exchange-rate policy, monetisation and rising yields could pressure banks, reserves and inflation.

Central Bank Governor Nandalal Weerasinghe urged stronger research and collaboration to navigate overlapping global shocks, calling for building external reserves, restoring fiscal space, state-owned enterprise reform and a stronger, well-capitalised financial system.

Sri Lanka's rupee closed at 309.05/15 to the US dollar on Friday, slightly stronger than the prior day's 308.80/90, while government bond yields fell (e.g. the 15.02.2028 bond at about 8.95–9.00% down from 9.05/10%). The rupee is nevertheless weaker week-on-week (308.55/65 last Friday).

Sri Lanka's cabinet approved the RE-MSME PLUS loan scheme to provide disaster-affected MSMEs with 3% annual loans (3-year term) and up to a 6-month grace period from 2026, targeting about 130,000 entrepreneurs; micro loans up to LKR 250,000 and small/medium up to LKR 1,000,000.

Sri Lanka sold Rs120.87bn of government bonds across 2030, 2032 and 2035 maturities, with average yields of 9.55% (2030), 10.29% (2032) and 10.67% (2035); the 2032 and 2035 bonds were available on tap.