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Friday October 9th, 2026

Call to liberalize Sri Lanka shipping for export competitive economy

ECONOMYNEXT – Liberalization of Sri Lanka’s shipping business to end current protectionism in the agency business, with other countries now taking the initiative to move ahead, two senior officials representing shippers have said.

Countries that liberalized have seen more overall businesses, including for small and medium businesses they said. Protection and restrictions however may be holding back the potential for Sri Lanka to become a maritime hub going beyond transshipment.

“The only beneficiaries of such policies have been those who hold agencies with the major shipping lines,” Global Shippers’ Forum Chairman and the Chairman of the Apparel Logistics Sub-Committee of the Joint Apparel Association Forum of Sri Lanka (JAAF), Sean Van Dort said in a statement.

“But the harsh economic reality we now face as a nation have made it impossible to justify sacrificing the interest of the nation, and the competitiveness of its exporters, exclusively for the benefit of just a few parties.

“Based on what the President and other key officials have stated in the lead up to Budget 2022 and subsequently, I believe that policy makers are starting to appreciate this fact.

“Throughout Sri Lanka’s post-independence development, every Government has signalled their ambition to transform our nation into a regional maritime hub.

“However with the exception of the bold efforts of the late Hon. Mangala Samaraweera, there has never been a Government that was willing to pursue the liberalization policies necessary to facilitate such a transformation.”

Reaping the benefits of an open, liberalized economy starts with shipping

From a global perspective Sri Lanka’s unwillingness to reform risks eroding the overall competitiveness of its logistics sector as a whole, Shippers’ Academy International Founder, Rohan Masakorala.

“Across Asia, and particularly in the Indian Ocean, Sri Lanka remains the only country to have maintained protectionist policies for shipping agents,” he said.

“By contrast, acknowledged global leaders in maritime logistics like Singapore and the UAE allow for 100% ownership of shipping and freight forwarding agencies, while countries like Malaysia are over 70% open.

“Most recently, Philippines and Vietnam also announced plans to liberalize their domestic industries, while Europe, the U.S. and even China allow for foreign ship owners to open local offices.

“If we fail to commit to a similar path of reforms, we risk lagging even further in our development, and eventually being left behind altogether Either we reform and adapt or we perish. There are no other choices.”

Opening for foreign investment and ownership, the sector as a whole would be forced to enhance its competitiveness, and eliminate hidden inefficiencies, he said.

It was as mistake to believe that opening will overall reduce opportunities for local businesses, as evidenced by countries like Singapore which has seen an overall growth.

Singaporean logistics sector, was home to 140 global shipping line headquarters, and still has room for over 5,000 local shipping agents.

“Meanwhile, the investments, knowledge and technology transfer infused through foreign ownership would expand the economies of scale across the Sri Lankan logistics sector, creating new niches for smaller players, and making export markets more accessible to Sri Lankan SMEs,” Masakorala said.

Those opposed to liberalization say that the shipping industry is already liberalized except for the “insignificant” business of local shipping agents, which are currently protected from foreign ownership, Maskorala and Van Dort said.

Opponents of liberalization also say opening up domestic shipping agencies to complete or even partial foreign ownership would risk removing domestic participation in this lucrative business, without securing any significant benefits for the nation.

Proponents of liberalization have argued that such policies only protect the interest of local shipping agents, while discouraging global shipping lines from engaging with the domestic market, and blocking private sector foreign direct investment into critical infrastructure.

While both camps have been deadlocked for decades, Sri Lanka’s unprecedented economic crisis and urgent need for foreign currency inflows has re-energized arguments in favour of liberalization the duo said.

In Sri Lanka freigh forwarding is also restricted for foreign investment.

The success of ExpoLanka, in which foreign investment was allowed with a temporary lifting of restrictions demonstrated the potential, Van Dort said.

“Foreign ownership brings numerous extremely valuable benefits, and we need not look further than the success of Expolanka, or any of the other logistics hubs that Sri Lanka is competing against to see the proof,” he said.

“By lifting ownership restrictions, we encourage international ship owners to get engaged and invested in Sri Lanka, and properly utilize our location to link up with their global networks.

“Instead we are currently treated as purely a cost center that feeds regional competitor ports that actively encourage ownership from global shipping lines. The added control that results encourages them to instead treat such ports as profit centers.”

Countries like Singapore and Dubai however have monetary stability allowing for stable economic conditions.

Sri Lanka however has a flexible exchange rate which has led to currency crises, permanent depreciation and social unrest. Instability has worsened after so-called flexible inflation targeting, where an attempt is made to target inflation without a floating exchange rate. (Colombo/Jan04/2022)

Sri Lanka sells extra Rs8bn Treasury bills after auction

ECONOMYNEXT – Sri Lanka has sold 8,000 million rupees of treasury bills offered on tap at average rates of 9.44 percent and 9.95 percent, the public debt management office said, bringing the total of bills sold in the week to 88 billion rupees.

Total market subscription was 16,025 million rupees.

The debt office sold a 6-month bill at 9.44 percent.

The debt office sold a 12-month bill at 9.95 percent.

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Sri Lanka Treasury bill yields rise marginally, Rs80bn sold

On Wednesday (7) the debt office raised 80 billion rupees of 3, 6 and 12 month bills. (Colombo/Oct9/2026)

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Foreign investors buy Sri Lanka rupee bonds after selling for two weeks

ECONOMYNEXT – Foreign investors bought Sri Lanka rupee bonds for the first time in three weeks in the week ended on October 01, Central Bank data showed, amid a stable rupee.

With the latest inflows, the island nation has witnessed net foreign buying in 14 weeks in the last 16.

Offshore investors bought a net 1,821 million rupees (US$5.5 million) worth of Sri Lanka rupee bonds. They sold a net Rs.16.5 billion worth of rupee bonds in the last two weeks.

The inflows helped boost foreign holdings in government securities to 196.8 billion rupees.

Analysts said a stable local currency helped foreign buying last week.

The rupee had been steady for more than three years before the sharp depreciation in May with the Central Bank citing higher oil and vehicle imports amid a lingering conflict in the Middle East.

The rupee has fallen 6.2 percent through October 2 this year.

Globally, investors are cautious about economic growth due to the impact of the latest Middle East escalation.

The island nation has enjoyed a total inflow of around 57.5 billion rupees into rupee bonds so far this year, following a net inflow of 71.5 billion rupees last year.

The island nation has seen an uptick in inflation in the last six months following a nearly 50 percent hike in fuel prices.

The government raised fuel prices last week after reducing in the last weeks of June and August.

The Central Bank raised its key monetary policy rate by 100 basis points in May to curb inflationary pressure stemming from higher demand.

Before the May rate hike, the Central Bank kept its key policy rates steady since May 2025 after reducing them by 825 basis points over 24 months since June 2023 and foreign investors have been buying rupee bonds despite slight depreciation in the local currency (Colombo/October 08/2026)

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Sri Lanka rupee closes at 330.95/331.00 to US dollar spot, bond yields steady

ECONOMYNEXT – Sri Lanka’s rupee closed at 330.95/331.00 to the US dollar in the spot market on Thursday, from 330.90/331.00 the previous day, while bond yields closed broadly steady, dealers said.

A bond maturing on 01.08.2030 closed flat at 11.25/35 percent.

A bond maturing on 15.10.2030 closed at 11.30/40 percent, down from 11.35/40 percent.

A bond maturing on 01.02.2031 closed at 11.35/45 percent, down from 11.40/45 percent.

A bond maturing on 15.12.2032 closed at 11.75/80 percent, up from 11.70/80 percent.

A bond maturing on 15.10.2034 closed at 12.05/15 percent, up from 12.05/10 percent. (Colombo/Oct8/2026)

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Sri Lanka, IMF in talks over new “long term growth targeted” deal after March 2027: Minister

ECONOMYNEXT – Sri Lanka is in discussion with the International Monetary Fund (IMF) on a new programme after the completion of the current Extended Fund Facility (EFF), Deputy Finance Minister Anil Jayantha told Parliament on Thursday.

“The current IMF EFF program is on track to conclude successfully in March 2027, marking the completion of its economic reform and recovery efforts under the arrangements,” the Deputy Minister said in response to a question raised by the opposition.

“In parallel, discussions are currently underway regarding the options beyond the current program, reflecting a shift from crisis-driven support towards a more sustainable, long-term growth-targeted engagement model.”

Sri Lanka sought IMF deal after the island nation experienced an unprecedented economic collapse that culminated in its first-ever sovereign default in April 2022.

Severely depleted foreign exchange reserves, exacerbated by years of loose fiscal policies, high-profile tax cuts, organic farming mandates that damaged agricultural yields, and the economic blow dealt by the COVID-19 pandemic, left the island nation unable to service its $51 billion external debt stock.

The resulting crisis triggered severe shortages of fuel, medicines, and staple foods, hyperinflation exceeding 70%, and widespread public protests that ultimately forced the resignations of key government figures, including former President Gotabaya Rajapaksa.

The four-year, $3 billion EFF program was conditioned on a rigorous slate of macroeconomic and structural reforms, including tax hikes, energy cost-reflective pricing, expenditure controls, and strict central bank independence.

Central to the arrangement was a complex sovereign debt restructuring process, requiring the island nation to negotiate bilateral debt relief with major sovereign creditors, such as China, India, and Paris Club members, alongside commercial international sovereign bondholders.

The implementation of the EFF has since driven a significant macroeconomic turnaround, marked by a stabilizing exchange rate, a rebuild of gross official foreign exchange reserves, and a return to positive GDP growth.

However, maintaining compliance with program targets has generated considerable social and political friction.

Demands for broader anti-corruption measures, tax fairness, and enhanced social safety nets remain high as the government balances strict IMF revenue targets against domestic pressures to alleviate the elevated cost of living. (Colombo/October 08/2026)

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Sri Lanka stocks close down 1.38-pct; LMF crossing pushes turnover

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed lower on Thursday, CSE data showed, with the benchmark All Share Price Index falling 1.38 percent.

The ASPI was down 283.21 points at 20,234.34, while the more liquid S&P SL20 was down 0.82 percent, or 47.82 points, at 5,768.58.

Positive contributors to the ASPI were HNB Life (up 3.04 percent at 144.25 rupees), Renuka Holdings (up 2.16 percent at 37.90 rupees), Odel (up 2.06 percent at 9.90 rupees), and Hayleys (up 0.22 percent at 223.00 rupees).

Carson Cumberbatch (down 3.39 percent at 676.25 rupees), Distilleries Company of Sri Lanka (down 2.85 percent at 51.10 rupees), Hemas Holdings (down 2.56 percent at 30.50 rupees), Dialog Axiata (down 1.34 percent at 44.10 rupees), and Hatton National Bank (down 0.99 percent at 375.50 rupees) were top negative contributors.

Market turnover was 2.74 billion rupees.

High turnover was largely driven by crossing transactions, with Lanka Milk Foods recording crossings of about 1 billion rupees and Sunshine Holdings seeing a crossing of around 300 million rupees. (Colombo/Oct08/2026)

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Sri Lanka’s SEC urges public not to deposit, invest in Quantum AI Limited  

ECONOMYNEXT – Sri Lanka’s Securities and Exchange Commission (SEC) has warned the public in dealing with a company called Quantum AI Limited for trading and investment and urged them not to deposit any funds.

The regulator, on its X platform, stated it “wishes to inform the public that Quantum AI Limited is not licensed, registered, or authorized by the SEC to conduct securities trading, investment services, or any other regulated capital market activities in Sri Lanka.”

“The public is strongly advised not to deposit funds, invest, or engage in any trading or investment activities through Quantum AI Limited.”

“Before investing, always verify that the entity is duly licensed or registered by the SEC. Protect your investments. Deal only with SEC authorized market intermediaries.” 

Officials from Quantum AI Limited were not immediately available for comment on the SEC’s statement. 

Sri Lanka has increasingly seen illegal firms taking deposits and investments while promising higher returns.

Last week, the Central Bank warned the public against investing in plantation companies that are not regulated by it. (Colombo/October 08/2026) 

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