News & market updates

Deputy Finance Minister says the government will assess whether to extend its three-month Rs.10bn fuel relief at the period's end and sees no immediate need to decide; he added the 50% vehicle import surcharge cut demand, with daily forex for vehicle imports down to $3.79m by 12 June.

The National Chamber of Exporters warned that a Central Bank gazette requiring exporters to convert foreign-currency proceeds to rupees by the 10th of the following month was introduced without industry consultation and could disrupt cash flow and raise costs. NCE urged flexibility to allow exporters to retain FX where future needs are demonstrated.

Sri Lanka imposed a temporary 50% surcharge on customs import duty for new personal vehicles; daily vehicle import outflows fell to US$3.79 by June 12, Deputy Finance Minister Anil Jayantha Fernando said. Vehicle imports totaled US$613m in Q1 2026 and US$821m by April, contributing to a 4.5% rupee depreciation and the central bank using US$211.3m of reserves in May.

Sri Lanka will stick to a 5% growth target despite the Central Bank's 100bp policy rate hike to 8.75% and falling consumption; Q1 GDP expanded 5.1%. The rate rise, 27% private credit growth and steep fuel price increases are cited as headwinds, while the IMF has cut its growth forecast to 3%.

Sri Lanka's rupee closed at 333.90/334.25 to the US dollar on Wednesday (from 333.00/334.50 the previous day) while government bond yields fell. The 15-Feb-2028 bond closed at 10.50/70% (down from 10.80/90%), with several other maturities also lower.

National Chamber of Exporters says the Central Bank's new Gazette requiring exporters to convert foreign-currency proceeds by the 10th day of the following month was introduced without industry consultation and may disrupt cash flows, raise costs and hurt competitiveness; members seek flexibility to retain funds for verified FX needs.

Secondary government bond market rallied and yields dipped on selected tenors (e.g. 15.12.26 at 10.25%; 15.02.28 ~10.85%). A Treasury Bill auction will offer Rs.70bn (Rs.35bn 91-day, Rs.25bn 182-day, Rs.10bn 364-day); USD/LKR about 334.75/335.50 and call money ~9.21%.

Sri Lanka's rupee was quoted at 333.50/335.00 to the US dollar and bond yields fell sharply ahead of a 70 billion rupee treasury bill auction. Yields on several government bonds eased (e.g., 01.08.2030 at 11.22/25% from ~11.40/50%), while Brent crude prices declined.

Sri Lanka rupee closed at 335.00/335.25 to the US dollar on Tuesday, weaker than 333.00/334.50 the previous day; bond yields fell and a 70 billion rupee Treasury bill auction is scheduled for Wednesday.

Secondary bond market rallied on peace-deal optimism and a reported budget surplus of Rs. 105 billion for Jan–Apr 2026, driving sharp declines in yields across the curve (2030 tenors around 11.30%–11.40%). The rupee strengthened to Rs. 333.00/334.50 and Brent crude fell, easing inflation and external pressures.

Sri Lanka's rupee was quoted at 333.00/334.00 to the US dollar while secondary market government bond yields fell further, with 2029–2033 maturities quoted around 11.10–11.77%. A 701 billion-rupee treasury bill auction is scheduled for Wednesday and the ASPI opened up 0.78% at 22,555.92.

Sri Lanka and India are exploring converting their roughly $6 billion bilateral trade to rupee-to-rupee settlement, with RBI and CBSL measures allowing Indian bank branches in Colombo to lend in INR and Sri Lankan banks to borrow INR to reduce dollar dependence and transaction costs.

The rupee opened stronger, with the USD/LKR spot at Rs.333.00/334.50 (versus Friday’s 335.50/336.00) after the Central Bank cut the period for exporters to convert proceeds to 30 days from 90, earlier pushing the rate to Rs.332.25/333.00.

CBSL Governor Nandalal Weerasinghe told Parliament the Sri Lankan rupee weakened 8% vs USD between end-2025 and 9 June 2026 and defended a flexible exchange rate under the FIT framework as a shock absorber, citing higher imports, lower tourist inflows, speculation and financial outflows.

Sri Lanka's rupee strengthened to 333.00/334.50 per US dollar from 335.50/336.00, and government bond yields fell sharply after news of a US‑Iran deal. Longer-dated yields eased notably — 15.12.2032 to 11.70/80% (from 12.25/40%) and 15.03.2035 to 12.05/25% (from 12.65/95%).

Parliament’s Committee on Public Finance flagged weaknesses in Sri Lanka’s external sector statistics, saying tourism earnings are hard to measure and that informal forex flows and unauthorised foreign payment gateways are blind spots. CBSL said premiums have narrowed, invited money-transfer operators to register and said investigations into illegal payment gateway use are under way.

Foreign holdings of Sri Lanka’s rupee‑denominated T‑bills and T‑bonds rose by Rs.13 million to Rs.121.34 billion in the week to 11 June, ending a five‑week outflow streak; holdings are down Rs.19.96 billion year‑to‑date and represent about 0.66% of outstanding govt securities.

Secondary bond market ended the week bullish as yields fell sharply across the curve after improved risk sentiment following reports of a potential US‑Iran peace deal. Weekly T‑bill yields rose (91-day to 10.09%), while Thursday's bond auction raised Rs.92.55bn (61.7% of offer) with mixed maturity outcomes.

Sri Lanka's rupee strengthened to 332.00/334.00 against the US dollar (from 335.50/336.00) and government bond yields fell sharply. Markets rallied after Pakistan announced a US‑Iran deal; selected bond quotes include 15.12.2032 at 11.50/70% (down from 12.25/40%).

The rupee ended the week firmer, closing at Rs.335.50/336.00 after the Central Bank cut the period for exporters to convert proceeds to 30 days from 90 to boost FX supply. It had strengthened to Rs.332.25/333.00 midweek after the move but gave up part of those gains before finishing the week firmer than early-week lows.

Sri Lanka's rupee closed at 335.50/336.00 per USD on Friday and government bond yields fell sharply (e.g. 15.02.2028 at 11.25/40%, 01.08.2030 at 11.90/12.05%, 15.12.2032 at 12.25/40%, 15.03.2035 at 12.65/95%). Dealers attributed the move to Donald Trump's announcement.

Sri Lanka's rupee strengthened to 335.50/336.00 per US$ while government bond yields fell across maturities (e.g. 01.07.2028 quoted at 11.40/70% versus 11.75/85% previously) amid increased secondary-market trading.

The rupee weakened to Rs. 335/337.50 in the interbank spot market after giving up part of Wednesday's gains (Wednesday close: Rs. 332.25/330). The midweek rebound followed the Central Bank tightening rules for exporters, cutting the conversion window to 30 days from 90.

Rs.150 billion Treasury Bond auction delivered mixed results — weighted average yields came in below expectations but the offered amounts were not fully raised and the longest 01.07.37 maturity was rejected. Secondary market yields eased after the auction, net liquidity surplus was Rs.66.62bn, overnight call/repo ~9.2%, and USD/LKR closed at 335.00/337.50.

Sri Lanka rupee closed at 336.00/337.00 to the US dollar on Thursday, weaker versus 332.25/75 the previous day, while bond yields were broadly steady with the 01.07.2028 at 11.75/85% and nearby maturities around 12%. TT rate quoted 328.00 buying, 337.00 selling.

The Central Bank of Sri Lanka briefed Parliament on current monetary policy, exchange-rate behaviour and the country's economic situation. Governor Nandalal Weerasinghe and senior CBSL officials answered MPs' questions and provided clarifications.

Sri Lanka's rupee was quoted at 333.00/335.00 to the US dollar on Thursday, slightly weaker than 332.25/332.75 the previous day, while the secondary bond market was quiet ahead of a 150,000 million rupee Treasury bond auction; onshore yields were around 11.85–12.30%.

The CBSL cut the mandatory conversion period for export proceeds from 90 days to 30 days, and the rupee strengthened to about Rs. 332.25/333.00 from Rs. 337.00/337.75. The move is intended to accelerate repatriation of export earnings and boost foreign-exchange liquidity to stabilise the market.

T-Bill yields rose for the fourth consecutive week—91-day 10.09%, 182-day 10.27% and 364-day 10.16%, the highest since late Sept 2024. The rupee appreciated after CBSL cut exporters' FX conversion time to 30 days; the auction accepted Rs.71.744b of Rs.140b (51.25%) ahead of a Rs.150b bond auction.

Health Minister Dr. Nalinda Jayatissa said authorities are reviewing requests to raise medicine prices amid rising import and production costs and exchange-rate movements. The Sri Lanka Chamber of the Pharmaceutical Industry warned supply-chain pressures, higher freight and fuel charges and rupee depreciation risk medicine shortages.