News & market updates

Sri Lanka's Central Bank bought a net US$70.5mn in June (US$96.3mn purchases, US$25.8mn sales) as the rupee mostly stabilized. The bank has net bought US$556.4mn in H1 2026 to rebuild reserves to meet IMF targets and ahead of sovereign bond repayments from April 2028.

Sri Lanka Customs collected 225.2 billion rupees in June 2026, 22% above its target, and first-half revenue rose 29.5% year‑on‑year to 1,373.8 billion rupees. Officials credited stronger enforcement, improved valuation practices, a rebound in import volumes and currency movements for the increase.

Sri Lanka rupee closed at 335.20/35 to the US dollar, firming from 335.90/336.00, while government bond yields edged up slightly with selected maturities closing around 10.35%–11.65%.

Sri Lanka's rupee was quoted at 335.25/35 to the US dollar, slightly stronger than 335.90/336.00 the previous day; bond yields edged up on profit-taking, with the 01.08.2030 quote rising to 11.25/28% from 11.18/25%.

CBSL expects inflation to remain around 6.8% in the coming months but, aided by lower global oil prices and if expectations remain contained, sees no immediate need for another policy rate hike. The central bank raised the OPR by 100bps in late May and says tightening is already transmitting through higher market interest rates and some reductions in domestic energy prices have been observed.

Foreign institutional big-ticket buying pushed Sri Lanka's secondary government bond yields lower, with the 15.10.30 maturity trading down to 11.23%-11.35%. The rupee appreciated to LKR 335.85/336.00, net liquidity surplus was Rs.81.20bn and overnight call/Repo averages were 9.21%/9.25%.

Sri Lanka's rupee closed at 335.90/336.00 to the US dollar on Thursday, firmer than 336.20/336.40 the previous day, while government bond yields fell across maturities (e.g. 15.09.2027: 10.35–10.45%; 01.08.2030: 11.18–11.25%).

The World Bank reclassified Sri Lanka from lower-middle-income to upper-middle-income effective July 1; 5.0% real GDP growth in 2025 and small population and exchange-rate effects pushed GNI per capita over the threshold. The WB warned the status is fragile due to high public debt and slowing growth.

Sri Lanka's rupee was quoted at 336.35/40 to the US dollar on Thursday and bond yields fell, with quoted yields on maturities from 2029–2036 around 10.95%–11.95%.

Treasury Bill weighted average yields rose for a second consecutive week—91-day and 182-day bills up 9bps to 10.23% and 10.30%, and the 364-day up 3bps to 10.20%—with the auction raising the full Rs.100bn offered. Secondary bonds rallied on large block buying and the rupee slipped to LKR 336.20/336.40.

Sri Lanka's rupee closed at 336.20/40 to the US dollar on Wednesday; bond yields were broadly steady, with the 15.09.2027 issue at 10.35/50%, 15.03.2028 at 10.55/65%, 15.12.2029 at 11.00/05% and 01.08.2030 at 11.30/38%.

Sri Lanka's current account recorded a US$194 million deficit in May 2026, the second consecutive monthly deficit and leaving a US$97 million deficit for January–May. The trade gap widened to US$4.7bn (Jan–May), fuel import spending rose 112% YoY in May, tourist earnings fell 5.1% YoY in May, remittances rose 26% YTD, reserves were US$6.9bn and the rupee was down 7.9% YTD.

Sri Lanka's motor vehicle import expenditure topped USD 1.071 billion in Jan–May 2026, with May alone at USD 250.0 million (personal vehicles USD 207.8m; commercial USD 42.3m), a 20.0% rise from April 2026, signalling increased foreign exchange outflows for the automotive sector.

Sri Lanka's telegraphic transfer rate was 331.6619/341.3051 LKR per US dollar (buy/sell); euro and pound rates were also reported. A Rs.100,000 million Treasury bill auction is ongoing.

Sri Lanka's current account posted a US$194m deficit in May 2026, the second consecutive monthly deficit, driven by a wider trade gap and a smaller services surplus despite higher remittances. The cumulative trade deficit reached US$4.7bn Jan–May 2026, fuel imports rose 112% YoY in May, and gross official reserves were US$6.9bn at end-May.

IMF Mission Chief Evan Papageorgiou said exchange-rate flexibility should remain the primary defence and foreign-exchange intervention should be limited to addressing excessive volatility. The IMF said monetary policy should be data-dependent and inflation will be assessed against the Central Bank's consultation bands.

President Anura Kumara Dissanayake reaffirmed the Government's commitment to completing the IMF-backed Extended Fund Facility program and said economic stabilisation must deliver tangible improvements in living standards, with under a year remaining on the EFF.

IMF said Sri Lanka's temporary tightening of vehicle import financing requirements did not derail its EFF program. The Central Bank reported motor vehicle imports rose 20% month‑on‑month to $250m in May, taking January–May imports to $1.071bn.

Secondary bond yields converged between 4- and 10-year maturities, flattening the yield curve as 4-year yields rose ~5bp while 10- and 11-year yields fell ~5bp. CCPI inflation rose to 6.8% y/y, net liquidity surplus was Rs.82.56bn and USD/LKR closed at 336.00/336.30.

Seylan Bank PLC partnered with AECC Global to offer tailored financing and easier foreign payments for Sri Lankan students studying abroad, including low fees and attractive exchange rates to ease funding and payments for overseas education.

IMF staff completed a June 24–30 visit, noting inflation rose from 1.6% y/y in Feb to 5.5% y/y in May after energy price increases and that authorities responded with a 100 bps policy rate hike and temporary on-budget relief (fuel, electricity, fertilizer, cash transfers). The IMF said sustaining reforms is critical and the Seventh Review of the EFF will assess program progress in the fall.

Foreign holdings of rupee government securities rose by Rs.14.51 billion in the week to 25 June — the largest weekly foreign inflow since 8 June 2023 — lifting total foreign holdings to Rs.135.86 billion. The Treasury Bond auction raised the full Rs.60 billion, flattening the yield curve; money-market liquidity improved and the rupee dipped.

UNP MP Ravi Karunanayake urged Parliament's Committee on Public Finance to summon Central Bank officials, Customs and the chief compliance officers of 13 banks to probe an alleged ~$1bn foreign-exchange fraud involving phantom imports and possible crypto-enabled capital flight.

Sri Lanka cut fuel prices effective June 30: Auto Diesel down Rs25 to Rs382/litre and Octane 92 down Rs20 to Rs414. Prices had risen sharply since Feb, driving up transport and grocery costs and pressuring retailers and logistics.

The LMD-PEPPERCUBE Business Confidence Index fell 16 points to 132 in June, marking a 20-month low. The drop accompanies a 7.8% year-to-date rupee depreciation, fuel price hikes, central bank forex interventions (over US$223m sold in May) and elevated inflation risks.

The Sri Lankan rupee depreciated 8.0% against the US dollar in 2026 up to June 26, the Central Bank reported; the CBSL showed the dollar buying rate at Rs.332.22 and selling at Rs.341.88 on June 26. The move will materially affect exporters and tourism-related sectors via revenue and cost translation.

Sri Lanka's rupee closed at 336.30/70 to the US dollar, firming from 337.25/35 the previous day, while government bond yields were broadly steady; select maturities ranged from about 10.35% (15.09.2027) to 11.75% (15.03.2035).

Sri Lanka's rupee was quoted at 336.90/337.00 to the US dollar on Friday, from 337.25/35 the previous day, while government bond yields were slightly higher — e.g. the 01.08.2030 bond at 11.25/30% (up from 11.20/25%).

Jeffrey Mohamed was arrested and remanded until 9 July over an alleged scheme to illegally remit nearly Rs.190 billion overseas by falsely claiming imports. Prosecutors say transfers in US dollars went via a Colombo Fort company using multiple bank accounts, with about 36 companies identified and probes into money‑laundering and possible drug-linked funds.

Rs.60bn Treasury Bond auction set for 26 June: Rs.45bn 15-Oct-2030 (11% coupon) and Rs.15bn 15-Mar-2035 (11.5%); secondary bond yields held broadly steady, net liquidity surplus was Rs.65.36bn and USD/LKR around 337.30.