ECONOMYNEXT – Foreign investors bought a net 8,297 million rupees (US$25.5 million) worth of Sri Lanka rupee bonds in the week ended on August 21, Central Bank data showed, amid a firmer rupee currency.
The latest buying boosted the foreign buying in the government securities to 81.2 billion (US$246.3 million) in the 10 straight weeks since June 19.
The inflows boosted foreign holding to 202.5 billion rupees, the highest figure the Central Bank has published in its Weekly Economic Indicators.
Officials at the Central Bank, however, said it may not be the record high as the figure changes daily with economic volatility during weekdays.
The net inflows came after the rupee started to stabilize, analysts said.
The rupee currency’s selling rate fell to a near three-year low of 354 against the U.S. dollar on May 21 before recovering and gaining to the 333 level.
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 6.1 percent through August 21 this year.
Globally, investors are cautious about economic growth due to the impact of the latest Middle East escalation.
The island nation enjoyed a total inflow of around 61.2 billion rupees into rupee bonds so far this year, following a net inflow of 71.5 billion rupees last year.
Analysts said Sri Lanka’s deflationary policies in the past helped inflows amid curtailed imports.
However, the island nation has seen an uptick in inflation in the last three months after a nearly 50 percent hike in fuel prices gradually.
The government reduced fuel prices in the last week of June and kept them steady in July as well.
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/August 27/2026)