News & market updates

Ceylon Chamber welcomed IMF approval of the combined 5th and 6th EFF reviews, unlocking about $695m in financing, and urged continued reforms to preserve macro stability amid external pressures from the Middle East. It called for a digital fuel QR system, clearer policy communication, and accelerated reforms to boost competitiveness in trade, tourism, logistics and digitalisation.

IMF Mission Chief Evan Papageorgiou said Sri Lanka’s Treasury does not buy dollars for debt service and that the central bank acts as the intermediary, buying FX and effectively monetizing the balance of payments — expanding reserve money and raising risks to inflation, reserves and the rupee.

Sri Lanka raised retail fuel prices effective May 31 (Auto Diesel +Rs15 to Rs407/L; Octane 92 +Rs24 to Rs434; Super Diesel +Rs20 to Rs478; Super Petrol +Rs25 to Rs495; Kerosene +Rs20 to Rs285), as the fuel import bill more than doubled to US$886m in April and prices near 2022 crisis levels.

Cargills (Ceylon) PLC reported a March-quarter profit of Rs2.63bn, up 31% y/y, and FY profit of Rs10.61bn (from Rs7.22bn); quarterly revenue rose 16.8% to Rs69.52bn. The group reduced net debt to Rs16.1bn, recorded non-recurring losses (Rs858m cyclone damage; Rs328m on disposal of a 6.54% stake in Cargills Bank) and warned of energy and currency pressures that could moderate consumption.

Sri Lankan Rupee depreciated 5.4% year-to-date against the US dollar through end-May 2026, the Central Bank said, citing heightened external pressures from the Middle East conflict; USD buying rate was Rs.324.45 and selling rate Rs.334.24 as of May 29, 2026.

Sri Lanka Customs exceeded its May revenue target of 187.8 billion rupees before month-end, collecting 100.1 billion in the first 26 days and marking the fifth consecutive month of outperformance; it has reached 51% of the 2,207 billion annual target in the first 146 days as enforcement and rebounding imports boost collections.

Foreign investors sold a net US$22.55 million (Rs 7,328 million) of Sri Lanka government securities in the week ended May 27, central bank data showed. The outflow is the third consecutive weekly net outflow (over US$51m) amid rupee weakness and a recent 100bp policy rate hike after a 35% fuel price rise.

Sri Lanka's current account moved into a deficit in April 2026, driven by a wider trade gap from higher fuel (US$886m in April) and vehicle imports and weaker tourist earnings; the Jan–Apr trade deficit rose to US$3.7bn from US$2.3bn a year earlier. Gross official reserves were about US$6.8bn and the rupee had depreciated 5.4% YTD by end‑May.

John Keells Holdings reported a 218% rise in quarterly profit to LKR 6.31 billion for the quarter ended March 31, 2026, with revenue up 62% to LKR 144.89 billion, driven by retail, transportation and leisure; a final dividend of LKR 0.10 per share was announced.

Sri Lanka's rupee closed at 331.00/332.00 to the US dollar on Friday, weaker than 328.50/332.00 on Wednesday. Local government bond yields fell: the 01.08.2030 bond closed at 11.80/90% (from 12.00/15%), 15.01.2033 at 12.20/40% (from 12.45/55%) and 15.03.2035 at 12.85/95% (from 13.00/15%).

The Ceylon Chamber of Commerce welcomed IMF approval of Sri Lanka’s 5th and 6th reviews, unlocking about USD 695 million under the EFF, and urged continued engagement and structural reforms to preserve macro stability, support investor confidence and address exchange-rate and energy pressures.

IMF Mission Chief Evan Papageorgiou said Sri Lanka’s monetary policy remains broadly appropriate despite a 100-basis-point CBSL rate hike and the IMF approving combined Fifth and Sixth EFF reviews that unlock about $700m. He expects inflation to stay near the 5% target and defended a flexible rupee as a shock absorber against external (including oil) shocks.

The Treasury Bond auction was fully subscribed, raising the full Rs.240 billion at the first phase with WAYRs of 11.86% (01.08.30), 12.32% (15.01.33) and 12.93% (15.03.35). Secondary market saw renewed buying; net liquidity surplus was Rs.126.70bn and USD/LKR closed near 328.50/332.

Ceylon Chamber of Commerce welcomed IMF approval of the 5th and 6th EFF reviews, enabling Sri Lanka to access about USD 695 million, and urged continued reform momentum to preserve macroeconomic stability amid external pressures. It reiterated measures including optimizing the fuel QR digital platform, clearer policy communication, and accelerating reforms in trade, tourism, logistics and digitalisation.

Sri Lanka's rupee traded at 328.00/330.00 to the US dollar on Friday and bond yields fell sharply (e.g., the 01.08.2030 bond quoted at 11.80/85% down from ~12.00/15%) after news of a US‑Iran truce and oil falling to $91/bbl; ASPI rose 100.53 pts to 22,299.76.

The Sri Lanka United Business Alliance (SLUBA) accused the government of policy failures and said unclear policy and the dollar crisis — including higher interest rates to strengthen the US dollar — are pushing businesses into distress and risking renewed national bankruptcy.

Free Lawyers alleged the Central Bank of Sri Lanka expanded M2b by Rs.1,653 billion in 2025 and a further Rs.610.7 billion in Jan–Mar 2026 via dollar purchases, linking this to recent rupee volatility. The CBSL countered that net FX operations injected about Rs.788.9 billion and that liquidity was partly absorbed by government repayments, withdrawals and coupon payments.

Cabinet approved revised regulations allowing foreign money or value transfer service providers to register and be supervised by the Central Bank under the Payment and Settlement Systems Act, strengthening AML/CFT oversight and formalising remittance and digital payments operations.

The rupee weakened versus the US dollar, with indicative TT rates at Rs.320.40/Rs.330.81 and interbank spot closing at Rs.328.50/Rs.332.00. The Central Bank capped trades at Rs.330, used moral suasion to calm markets and said it may force exporters to convert dollar earnings sooner.

IMF Executive Board completed the combined Fifth and Sixth reviews of Sri Lanka’s EFF, unlocking SDR508 million (≈US$695m) in immediate financing. Program performance was generally strong, but some continuous criteria were missed and risks from the Middle East war and Cyclone Ditwah weaken the outlook.

IMF approved a US$695m disbursement to Sri Lanka under its EFF despite breaches including intensified import controls and a cyberattack that led to a missed US$2.5m external payment; authorities requested a waiver and pledged corrective actions.

Sri Lanka's rupee closed at 328.50/332.00 to the US dollar on Wednesday, weaker than Tuesday's 324.00/325.50, while government bond yields rose (01.08.2030: 12.00/15%, 15.01.2033: 12.45/55%, 15.03.2035: 13.00/15%).

Sri Lanka's rupee was quoted at Rs328.00/330.00 to the US dollar on Wednesday, weaker than Rs324.00/325.50 the previous day. The secondary bond market was quiet amid an ongoing auction of 240,000 million rupees in treasury bonds, with a hamstrung interbank market and importers buying forwards up to Rs380–400.

Central Bank Governor Nandalal Weerasinghe said importers had bought dollars forward at up to Rs380-400 amid a hamstrung interbank market, and the central bank raised rates by 100 basis points to slow credit and stabilise FX markets.

Central Bank Governor Nandalal Weerasinghe said the IMF-supported EFF program allows flexibility for policy adjustments, including targeted subsidies and revisions to key performance targets. He said the IMF Executive Board will approve the combined fifth and sixth reviews on Wednesday and that NIR targets and fuel pricing remain under periodic review.

The Sri Lanka rupee strengthened about 7% against the US dollar since last Thursday, with indicative TT rates easing to Rs. 318.32/328.69 and interbank spot at Rs. 322.00/325.00; the Central Bank capped trades at Rs. 330 for some banks and urged exporters to convert dollar earnings sooner.

Sri Lanka Customs set the USD exchange rate for import valuations at Rs.351.17 for 25–29 May, above prevailing interbank rates despite recent rupee recovery; observers urged the Central Bank to align the Customs rate with market rates, warning it could raise import costs and consumer prices.

Central Bank of Sri Lanka says FX market distortions were temporary and interbank liquidity has been restored after targeted steps; interbank rates rose from about Rs.320 to Rs.330 at the peak while some customer trades reached Rs.346–Rs.354. The CBSL said it used limited intervention, continues overnight liquidity absorption and can deploy further tools if volatility returns.

Central Bank hiked the OPR by 100bps to 8.75%; T-bill yields rose sharply (91-day 9.36%, 182-day 9.68%, 364-day 9.83%) and the weekly auction was undersubscribed, while the secondary bond market turned bearish; USD/LKR closed around 324.50/326.00.

Tokyo Cement reported FY26 turnover of Rs.61,011m (+22%) and 4Q turnover of Rs.17,623m (+36%), with FY26 PAT of Rs.2,580m (down from Rs.3,459m). Profitability was hit by rupee depreciation, higher material, fuel and financing costs even as volumes rose 28% and national cement consumption grew 19% to 5.62m MT.