News & market updates

Sri Lanka's rupee was quoted at 335.75/80 to the US dollar in the spot market while bond yields were broadly steady (e.g. a 15.12.2029 bond at ~10.95-11.05%). Rs 140,000 million of Treasury bills are to be issued via auction on Aug 5.

Fitch affirmed People's Bank's National Long-Term Rating at 'AA-(lka)' with a stable outlook. Fitch cited the bank's financial strength but said heavy sovereign exposure, rising interest rates and higher credit costs will pressure profitability and flagged rising pawning concentration (~19% of gross loans).

The Central Bank of Sri Lanka published its Market Operations Report on 31 July 2026, saying it tightened monetary policy in H1 2026 and short-term interest rates rose. It reported surplus liquidity from net FX purchases and some rupee depreciation pressures, with FX intervention to curb volatility.

Sri Lanka's central bank said the rupee depreciated 7.9% against the US dollar in H1 2026 (from 309.99 to 336.66 USD/LKR) and that it intervened in FX markets, recording net FX purchases of $556m for the half. The central bank also raised the OPR by 100bp to 8.75% on May 26.

Sri Lanka's rupee was quoted at 335.60/70 to the US dollar on Monday, while government bond yields moved lower (e.g. the 01.08.2030 bond at 11.25-11.30%). Telegraphic transfer dollar rates were 331.25/340.25 and Rs 140,000 million of Treasury bills will be auctioned on Aug 5.

The Central Bank of Sri Lanka was a net purchaser of $556.3m in 1H 2026 (bought $982.2m, sold $425.9m) and injected about Rs.262.5bn into the domestic money market via FX purchases and swaps to rebuild reserves and curb exchange-rate volatility.

The Rs. 250 billion Treasury Bond auction was fully taken up, sparking a secondary-market rally that drove yields lower across the curve. Short-term T-Bill yields fell for a third week (91-day to 9.86%), foreign holdings rose by Rs.6.44bn to Rs.188.82bn and the rupee strengthened to Rs.335.65/335.80.

Headline inflation rose to 7.3% in July 2026 from 6.8% in June, breaching the Central Bank's 7% upper target. The CBSL said higher housing rents and food inflation, and a c.47% fuel price rise after Middle East supply disruption, drove the increase; the central bank last month kept the policy rate unchanged and expects inflation to remain above target in the near term.

Colombo CCPI inflation rose to 7.3% in July, breaching the Central Bank's upper target limit and reaching a three-year high. Non-food inflation accelerated to 7.8% and core inflation was 4.4%; the Central Bank had raised policy rates by 100bps in May as a response to administered price adjustments.

Sri Lanka's rupee strengthened to 335.65/80 per US dollar in the spot market from 336.00/10 the previous day, dealers said. Government bond yields edged lower, with the 15.10.2030 bond around 11.55-11.60% and the 01.07.2037 bond about 12.75-12.80%.

Treasury Bond auctions raised the full Rs.250 billion offered in the first phase, with weighted average yields of 11.90% (01.02.2031), 12.42% (15.10.2034), 12.91% (15.08.2036) and 13.01% (01.07.2037). The secondary bond market rallied after the auction, pushing yields below prior levels, while the rupee gained marginally to around Rs.336 on spot contracts.

Sri Lanka's public debt management office sold Rs14,000 million of 3-, 6- and 12-month Treasury bills on tap at average yields of 9.86%, 10.21% and 10.20%, bringing total bills sold this week to Rs154 billion; total market subscription was Rs41,324 million.

Sri Lanka's rupee closed at 336.00/10 to the US dollar on Thursday, slightly firmer from 336.10/20, while government bond yields mostly edged down (e.g. 2028 paper 10.65/70% from 10.73/80%, 2030 11.55/65% from 11.70/80%).

The Federal Reserve left interest rates unchanged in a split decision, leaving bond markets uncertain and Asian stocks trading volatile after a week-long rout. Brent futures slipped below $90 amid Middle East fighting and longer-dated U.S. Treasury yields rose to multi-decade highs.

Deputy Minister Anil Jayantha Fernando said S&P's favourable assessment reflects policy consistency, stronger fiscal management and improved debt management but warned structural vulnerabilities remain, notably a Rs.2,500 billion interest bill that limits development spending, energy dependence and exposure to external shocks. He added government revenue had reached 63.5% of the annual target by July and foreign exchange reserves and the T&C assessment have improved.

Short-term Treasury Bill weighted average yields fell for a third consecutive week, the 91-day yield declined nine basis points to 9.86% and the 182-day yield fell three bps to 10.21%, while the 364-day held at 10.20%; the auction raised the full Rs. 140 billion offered. Money-market liquidity was strong (net surplus Rs. 185.96 billion) and the secondary bond market saw mixed moves ahead of a Rs. 250 billion Treasury Bond auction due 30 July.

Sri Lanka's rupee was quoted at 335.95/336.05 to the US dollar on Thursday, slightly firmer than 336.10/336.20 on Tuesday; government bond yields were broadly steady, with the 15.12.2028 bond at about 10.70/85% and 2029-2030 maturities quoted around 11.10%-11.75%.

Sri Lanka sold all Rs140 billion of Treasury bills at Tuesday's auction as yields dipped on shorter maturities: the 3-month yield fell 9bp to 9.86% (Rs71.93bn sold), the 6-month fell 3bp to 10.21% (Rs50bn sold), and the 12-month was unchanged at 10.20% (Rs18.06bn sold).

Sri Lanka's rupee closed at 336.10/20 to the US dollar on Tuesday, versus 336.20/35 the previous day. Government bond yields edged mostly up on select tenors: 2028 and 2030 rose slightly, 2033 fell, while several issues were flat.

Secondary bond market opened subdued ahead of a Rs. 140 billion Treasury Bill auction today and a Rs. 250 billion Treasury Bond auction on Thursday. Yields edged higher on selected maturities and several block trades supported transaction volumes.

S&P affirmed Sri Lanka's sovereign ratings at 'CCC+/C' with a stable outlook on July 27, 2026, and upgraded the transfer and convertibility assessment to 'B-'; it flagged a heavy interest-to-revenue burden (~45.6%). The agency noted resilient GDP growth but vulnerabilities from high debt, external shocks (Middle East war, Cyclone Ditwah) and a 100bp policy-rate hike to anchor inflation.

Sri Lanka's rupee was quoted at 336.15/25 to the US dollar on Tuesday, slightly stronger than 336.20/35 the previous day, while local government bond yields were broadly steady with small moves across maturities. An auction of Rs.140,000 million T-bills is ongoing; TT USD rates were 331.75/340.75.

Colombo Dockyard (DOCK) posted a profit of Rs86.28mn for the quarter ended 30 June 2026, reversing a Rs808.36mn loss a year earlier (EPS Rs0.22 vs loss of Rs3.51). Group revenue fell 6.8% to Rs5.84bn, with ship repairing at Rs3.95bn, gross profit up 250.7% and finance costs down 63.8%.

Sri Lanka's rupee closed flat at 336.20/35 to the US dollar and government bond yields were broadly steady, with most listed maturities little changed (e.g. 15.09.2027 at 10.30/40%, 15.12.2029 at 11.25/30%).

Sri Lanka was the fourth-largest improver in the IIF's 2026 Investor Relations and Debt Transparency assessment, with its score rising to 43.67 from 37.33. The Finance Ministry said gains were driven by stronger debt transparency and ESG disclosure, expected to boost investor confidence and market access.

Secondary government bond yields edged higher on selected longer maturities while Treasury bill yields fell; the 91-day yield declined 18 bps to 9.95%. Foreign holdings of rupee government securities rose by Rs.5.83bn to Rs.182.39bn and system liquidity remained in surplus at Rs.163.07bn.

Ceylon Cold Stores reported a profit of Rs.1.06bn for the quarter ended 30 June 2026, down 3% y/y, and approved a first interim dividend of Rs.1.08 per share. Group revenue rose 18% to Rs.50.78bn while net finance costs increased 26% to Rs.727.76m.

Sri Lanka's rupee was quoted at 336.25/45 to the US dollar on Monday, little changed from Friday; bond yields were broadly steady, with 2028–2030 maturities trading around 10.75%–11.65%.

Sri Lanka ranked the 4th largest global improver in the 2026 IIF Investor Relations and Debt Transparency Report, with its Investor Relations Country Score rising to 43.67 (from 37.33) and debt-transparency ranking improving from 19th to 5th. The PDMO's investor-relations program and stronger debt management aim to broaden the investor base and reduce the borrowing uncertainty premium.

Sri Lanka's rupee closed at 336.20/35 to the US dollar on Friday and government bond yields edged up, with 2030–2037 maturities rising modestly to around 11.58%–12.75%.