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Friday October 16th, 2026

Is Mahinda leading Sirisena down the Garden Path?


The lights are dimmed in the arena. The spotlights are trained on the boxing ring in the center. There is a referee, bearded, wearing large thick glasses and wrapped in a shapeless tunic, leaning against the ropes and occasionally glancing at his watch.

But there are no fighters, yet.

There is a susurrus from the crowd and the muffled sounds of scuffling near the ring, but the bout hasn’t begun and the crowd’s impatience grows because they know there’s going to be a fight, but are unsure who the contestants are.

In the week to ten days that have passed, there indications who our prizefighters may be in the Presidential elections due in less than nine months.

Gotabaya  the candidate

From the Rajapaksa camp, it will be Gotabaya Rajapaksa, who will contest as the Sri Lanka Podujana Peramuna nominee. There’s a caveat, though, as he needs to renounce his American citizenship before nominations are called, as dual citizens are barred from holding elected office.

Gotabaya Rajapaksa leaves court surrounded by bodyguards/Sarath Kumara RepublicNext

Rajapaksa has been conducting his campaign over the past 18 months or so. In it, he has emphasized that he looks to develop the country and “instill discipline.” He also takes credit for the “beautification of Colombo.” His economic policies are close to the United National Front’s Western Liberalization agenda, which contrasts with the professed “Socialism” of his brother Mahinda.

On the down side, he has never been a politician and his achievements in public office have been when he was the all-powerful Defense Secretary in a war situation, backed by his strongman brother, who is one of the most popular politicians this country has ever seen.

The younger Rajapaksa carries considerable baggage as he faces multiple charges of corruption including in the infamous MIG purchase and alleged misappropriation of Government funds to build a memorial for his parents. He is seen as an autocrat who has threatened the press and belittled the murder of journalists. He also has said that he does not believe that the minorities, particularly the Tamils of the North and East need a political solution, but an economic deal. He has also protected Right Wing extremist groups that have attacked Muslims. In keeping with the SLPP’s voter base, Rajapaksa will aim to win the Presidency by garnering most of the majority community votes.

Ranil Wickremesinghe a third attempt

Prime Minister Ranil Wickremesinghe in Jaffna wooing the North/ PM Media

His possible opponent, nominated by the United National Front, will be UNP party leader Ranil Wickremesinghe. Wickremesinghe has been Prime Minister five times and lost two bids at the Presidency. Twice, he has stepped aside in favor of a “Common Candidate.” At present, there are no other candidates who can make the cut from the party, although there is a school of thought that Speaker Karu Jayasuriya is also a possible candidate.

Wickremesinghe is a seasoned politician who has consistently pursued Liberal economic policies. In recent years, he has been an advocate of the free media, and championed the Right to Information Act, although he was a senior Cabinet Minister during the Presidency of R Premadasa in the late 1980s and early ’90s when there was suppression of the Media. His oblique link to the Bonds Scam has dented his reputation as “Mr Clean.” Expect him to advocate a Liberal policy and continue to build relationships with minority parties.

So what of President Sirisena?

And for the first time, turning this contest into a possible three-way fight – a Donnybrook  brawl rather than a clean bout under Queensberry rules – could be the decision by the incumbent President Maithripala Sirisena to run again. Sirisena has made no secret that he would like to seek a second term in office, although he vowed not to do so when he was elected in 2015.

President Maithripala Sirisena in campaign mode in Polonnaruwa/Udesh Guneratne President’s Media

Currently, he looks like he is on the campaign trail, travelling across the country, declaring open buildings, handing out freebies, and being photographed with school children. He has decided to show his electoral strength using the considerable resources he commands as the President.  

Sirisena’s Sri Lanka Freedom Party was beaten into a poor third position during the Local Government election and during the political crisis, he was further diminished as a leader. He certainly will not get any support from the UNF and its constituent parties, and his short-lived romance with the Rajapaksa camp looks like it will end shortly.

As rumors circulated that the former President had informed Sirisena that he will not be supported by the SLPP at a future Presidential poll, Mahinda Rajapaksa’s spokesmen issued vehement denials. One of them told me “certainly not. We have not said that to the President. How can we say that when we are negotiating an alliance between the SLFP and the SLPP? First, we have to decide who our candidate is.” Mahinda added to these denials by telling Mediapersons on Wednesday (27) that “Gotabaya is not confirmed and Basil will not contest. We will decide who our candidate is when we see the UNP candidate.”

And now the Garden Path

But the very negotiations between the SLPP and the SLFP are an indication that things are not going well for the Sirisena faction. At the talks, the SLFP side has sent in comparative heavyweights General Secretary Dayasiri Jayasekara and former General Secretary Prof. Rohana Lakshman Piyadasa. However, from the SLPP, the participants are lightweights. Prof G L Peiris is the nominal head of the party and the other two MP Dullas Alahapperuma and Academic Jagath Wellawatte. Reports say that some sharp differences have emerged, although publicly, the two parties are maintaining that they will build an anti-UNF front.

Then there is the move by the UNF to ask a number of SLFPs out in the cold without a Ministerial Portfolio to join them to form another National Government. UNP sources say there are at least 7 SLFPers willing to join the UNF. One of them, Wijith Wijijayamuni de Zoysa, appeared with the PM at the recent ceremony in Hambantota and made the cryptic comment that the SLFP “is shuffling the pack (of cards) and I will take a decision depending on where the cards fall.”

On the other hand, Former Minister and UPFA MP Duminda Dissanayake says Sirisena should contest. He said his party would select another candidate only if the President is not interested in a second term.

Expect fickle, unprincipled MPs from whatever party to go with a possible winning candidate rather than back a losing captain and risk more years in the wilderness without ministerial perks.

In the meantime, the SLPP is going through with the charade of the talks with the SLFP with the implication that Sirisena might get the new alliance’s support. One source said “the President is in denial” that Mahinda will support him.

So that hope will surely fade away and Sirisena will come to the conclusion that all this time, Rajapaksa was leading him down the garden path.

Sri Lanka rupee at 331.15/25 to US dollar spot, bond yields steady

ECONOMYNEXT – Sri Lanka’s rupee was quoted flat at 331.15/25 to the US dollar in the spot market on Friday, while bond yields were steady, dealers said.

A bond maturing on 15.10.2028 was quoted flat at 10.60/70 percent.

A bond maturing on 15.06.2029 was quoted at 10.95/11.05 percent.

A bond maturing on 15.10.2030 was quoted at 11.41/45 percent, up from 11.40/45 percent.

A bond maturing on 01.12.2031 was quoted at 11.65/73 percent, up from 11.65/70 percent.

A bond maturing on 15.12.2032 was quoted at 11.75/90 percent, up from 11.75/85 percent.

A bond maturing on 15.01.2033 was quoted at 11.85/95 percent, up from 11.95/12.00 percent.

A bond maturing on 15.10.2034 was quoted flat at 12.20/30 percent.

The telegraphic transfer rate for the dollar was 326.70 buying, 335.70 selling; the euro was 363.6850 buying, 377.4658 selling; pound was 432.5942 buying, 446.7026 selling.

On the Colombo Stock Exchange the All Share Price Index was up 0.56 percent, or 111.97 points, at 20,083; while the S&P SL20 was up 0.63 percent, 35.68 points, at 5,734. (Colombo/Oct16/2026)

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Sri Lanka services expands at slower rate in September 2026: PMI

ECONOMYNEXT – Sri Lanka’s services sector expanded at a slower rate in September 2026, according to a Purchasing Managers Index compiled by the central bank, which registered an index value of 60.5, compared to 65.6 the previous month.

“Business Activity increased in September 2026, reflecting improvements across several sub-sectors, led by financial services, with notable contributions from education and professional services,” CBSL said.

New businesses increased in September 2026, registering 60.9 from August’s 60.0, due to the expansion in the financial services, with positive contributions from the insurance, education, professional, and other personal services sub-sectors.

Employment increased in September, “as firms across several sectors increased recruitment to meet operational needs and support business expansion”.

Backlogs of Work declined in the month, although at a slower rate compared to the previous month.

Broader global economic uncertainties continued to pose downside risks to the outlook, CBSL said. (Colombo/Oct15/2026)

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Sri Lanka manufacturing PMI steady at 53.0 in September, growth continues

ECONOMYNEXT – Sri Lanka’s manufacturing sector expanded at a steady rate in September 2026, registering a value of 53.0 on a Purchasing Managers Index compiled by the central bank, same as the previous month.

“This indicates that manufacturing activities continued to expand at a similar pace during the month,” CBSL said, noting the outlook remains positive, driven largely by optimism on year-end seasonal demand.

The New Orders sub-index expanded in the month, registering 51.0, attributed to positive developments in both the food and beverages and textiles and wearing apparel manufacturing sectors.

The Production sub-index also registered 51.0, for the same reason.

The Employment sub-index expanded at a slower pace, registering 52.6, from the previous 54.8.

The Stock of Purchases sub-index moderated towards the neutral threshold, “indicating broadly unchanged inventory levels during the month,” CBSL said.

Suppliers’ Delivery Times sub-index remained lengthened in September. (Colombo/Oct15/2026)

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Sri Lanka rupee closes at 331.15/25 to US dollar spot, bond yields steady

ECONOMYNEXT – Sri Lanka’s rupee closed flat at 331.15/25 to the US dollar in the spot market on Thursday, while bond yields closed steady, dealers said.

A bond maturing on 01.08.2030 closed flat at 11.35/40 percent.

A bond maturing on 15.10.2030 closed at 11.40/45 percent, up from 11.37/43 percent.

A bond maturing on 01.02.2031 closed flat at 11.45/50 percent.

A bond maturing on 15.12.2032 closed flat at 11.75/85 percent.

A bond maturing on 15.10.2034 closed at 12.20/30 percent, up from 12.12/20 percent. (Colombo/Oct15/2026)

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Sri Lanka’s Sampath Bank to raise Rs10bn in debenture sale

ECONOMYNEXT – Sri Lanka’s Sampath Bank plans to raise 10 billion rupees through the issuance of Basel III-compliant debentures, it said in a market filing.

Up to 100 million listed, rated, unsecured, subordinated, redeemable 5-year (2026/ 2031) and 7-year (2026/ 2033) instruments will be offered at 100 rupees each.

The proposed instruments will carry a non-viability conversion feature, the company said.

Initially 70 million debentures will be issued, and another 30 million in the event of an oversubscription of the initial issue.

Fitch rates Sri Lanka Sampath Bank’s Rs10bn debenture issue A(lka)

The issue has received CSE approval.

The subscriptions list opens on October 20. (Colombo/Oct15/2026)

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Sri Lanka sells extra Rs7.2bn Treasury bills after auction

ECONOMYNEXT – Sri Lanka has sold 7,206 million rupees of treasury bills offered on tap at average rates of 9.30 percent, 9.44 percent and 9.95 percent, the public debt management office said, bringing the total of bills sold in the week to 73.332 billion rupees.

Total market subscription was 7,206 million rupees.

The debt office sold a 3-month bill at 9.30 percent.

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

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

On Wednesday (14) the debt office raised 66.12 billion rupees of 3, 6 and 12 month bills after offering 90 billion.

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Sri Lanka Treasury bill yields rise on shorter term, less bills sold

The settlement date is October 16. (Colombo/Oct15/2026)

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