An Echelon Media Company
Thursday October 15th, 2026

Sri Lanka rupee is floated, Rs230 a guidance: CB Governor

ECONOMYNEXT – Sri Lanka’s forex markets are braced for a float of the rupee after the central bank said it will no longer hold the rupee at 200 to the US dollar, amid suggestions that further monetary tightening is needed to prevent a steep fall of the rupee.

The central bank itself has called for tighter fiscal policy to help manage the exchange rate better.

The central bank said on Monday night “greater flexibility in the exchange rate will be allowed to the markets with immediate effect and it was “of the view that forex transactions would take place at levels which are not more than Rs. 230 per US dollar.”
Central Bank Governor Nivard Cabraal said the change in stance was needed to given the changing global scenario.

“We have given a guidance. It is a float,” Cabraal told EconomyNext. “We stand ready to take additional policy measures.”

However the current policy measures were sufficient, he said.

The central bank has also suggested hiking fuel and energy prices to the government as part of an 8 point plan.

The central bank is awaiting a response to the 8 point plan, Cabraal said.

Hiking taxes and fuel prices bring in tighter fiscal policy allowing the central bank to better conduct monetary policy.

Hiking fuel prices and taxes would reduce domestic credit and reduce the required corrective interest rate.

Sri Lanka has to free float the rupee and not try to peg it at a new level, former Deputy Governor W A Wijewardane said.

“In principle allowing the exchange rate is the right move,” he said. “But if this is a devaluation and they try to keep at 230 it will not eliminate the parallel exchange rates. The kerb rate will simply go up.”

A float will end interventions (reserves for imports) and their sterilization with new money, which triggers new import demand.

However recent interest rate hike of 100 basis points is not enough, he said.

“This interest rate hike is also not enough,” Wijewardane said. “Just increasing it by 1 percent is not enough.

“Inflation is at 15 percent and the budget deficit is high. The rate has not addressed the macro-economic imbalances.”

If interest rates are too low to curb domestic credit and finance the budget, the rupee can fall further than required.

Sri Lanka business chambers also suggested pre-emptive debt restructuring which would also reduce the corrective interest rates.

RelatedSri Lanka should market price energy, re-structure debt, go to IMF: biz chambers

Analysts had also warned that a surrender requirement to the central bank which create money will also undermine the exchange rate further. (Colombo/Mar08/2022 – Update IV)

Sri Lanka to consider cash/dollar incentives for tourism promotors: President

ECONOMYNEXT – Sri Lanka is considering a tourism industry request to provide incentives in dollars or cash to those who bring more tourists into the country from next year, President Anura Kumara Dissanayake told an investor forum this week.

Speaking at the Sri Lanka Economic and Investor Summit 2026 on Monday (12), the President said the tourism industry has submitted a proposal to raise incentives over the previous year for those who bring in tourists above the target set by the government.

“We are currently considering provisions in the upcoming budget to offer a cash or dollar incentive per tourist above that threshold through the Tourism Development Authority,” he told the gathering when speaking about the plans to boost tourism.

“This would incentivize companies and institutions to bring in higher numbers of tourists.”

The incentive will be paid on the volume exceeding that benchmark, he said.

“For example, if 100 tourists visited previously and 120 arrive the following year, an incentive wouldn’t apply to the base 20, but rather on the excess beyond a certain growth threshold.”

Sri Lanka has pinned hopes over strong tourism growth for more job creating and foreign currency inflows. (Colombo/October 14/2026)

Continue Reading

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

ECONOMYNEXT – Sri Lanka’s rupee closed at 331.15/25 to the US dollar in the spot market on Wednesday, weaker from 331.00/10 the previous day, while bond yields edged up slightly on the shorter end of the yield curve, dealers said.

A bond maturing on 01.08.2030 closed at 11.35/40 percent, up from 11.30/35 percent.

A bond maturing on 15.10.2030 closed at 11.37/43 percent, up from 11.35/40 percent.

A bond maturing on 01.02.2031 closed at 11.15/50 percent, up from 11.42/47 percent.

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

A bond maturing on 15.10.2034 closed at 12.12/20 percent, up from 12.12/18 percent. (Colombo/Oct14/2026)

Continue Reading

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

ECONOMYNEXT – Sri Lanka’s Treasury bill yields rose on the shorter tenor at Wednesday’s auction, with 66.12 billion rupees of bills sold of an offered 90 billion, data from the Public Debt Management Office showed.

The 3-month bill was up 4 basis points at 9.30 percent, with 40 billion rupees offered and 40.19 billion rupees sold.

The 6-month bill was unchanged at 9.44 percent, with 30 billion rupees offered and 8.45 billion rupees sold.

The 12-month bill was unchanged at 9.95 percent, with 20 billion rupees offered and 17.48 billion rupees sold.

All 3 bills are available on tap. (Colombo/Oct14/2026)

Continue Reading

Sri Lanka stocks close down 1.4 pct on geopolitical concerns, profit-taking

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Wednesday, CSE data showed, with the benchmark All Share Price Index moving down 1.40 percent.

The ASPI was down 281.42 points at 19,796.06, while the more liquid S&P SL20 was down 0.94 percent, or 53.67 points, at 5,676.43.

Market sentiment was largely weighed down by geopolitical tensions in the Middle East and fluctuating oil prices, alongside margin calls, profit-taking, and the day’s Treasury bill auction.

“Things are moving more on sentiment rather than fundamentals these days, mainly with oil price fluctuations and Middle East developments, along with some margin calls and profit-taking,” Shahana, Senior Assistant Manager – Research at First Capital, said.

Positive contributors to the ASPI were Haycarb (up 2.84 percent at 199.50 rupees), Teejay Lanka (up 1.41 percent at 28.70 rupees), Aitken Spence (up 0.57 percent at 133.25 rupees), and Vidullanka (up 0.47 percent at 21.30 rupees).

Carson Cumberbatch (down 4.86 percent at 655.50 rupees), Tokyo Cement Company (down 4.79 percent at 73.50 rupees), Dialog Axiata (down 2.98 percent at 42.30 rupees), Distilleries Company of Sri Lanka (down 2.16 percent at 49.90 rupees), and Commercial Bank of Ceylon (down 0.63 percent at 197.25 rupees) were top negative contributors.

Market turnover was 1.93 billion rupees, roughly 35 percent above the monthly average. Capital goods led turnover with 405.82 million rupees, followed by the banking sector. Crossings were recorded in Dialog Axiata, DIMO, and John Keells Holdings, while foreign investors recorded a net selling of close to 5 million rupees.

Galadari Hotels (Lanka) announced that, following the conclusion of its ongoing refurbishment and pursuant to approval from Radisson Hospitality Belgium BV under the Hotel Management Agreement, the reopening of the hotel as ‘Radisson Blu Hotel Galadari Colombo’ is scheduled during the fourth quarter of 2026. (Colombo/Oct14/2026)

Continue Reading

Sri Lanka Customs set to reach fresh record revenue this year: analysts

ECONOMYNEXT – Sri Lanka Customs is likely to achieve a fresh record high revenue this year after reaching this year’s target of Rs. 2,207 billion this week, with more than 11 weeks to the year-end, analysts say.

Customs Spokesman Chandana Punchihewa said the revenue-collecting body had already surpassed this year’s target on Tuesday (13), reaching Rs. 2,208 billion.

The Customs exceeded its target for the second straight year in 2026.

Last year, Customs collected a record 2,551 billion rupees in revenue, exceeding a revised target of 2,241 billion rupees for the year and achieving 64.2% higher revenue than the previous year’s revenue of 1,553 million rupees.

Analysts say Customs will surpass last year’s record revenue by the end of November if there are no major policy reversals or disruptions to the economy in the country during that time.

Customs’ 2026 target of 2,207 billion was 13.5% less than last year’s because they originally expected a significant decline in car imports early this year. (Colombo/October 14/2026)

Continue Reading

Sri Lanka President reveals timeline for new laws related to SOE, investments

ECONOMYNEXT – Sri Lanka President Anura Kumara Dissanayake revealed the timeline for key laws related to State-Owned Enterprises (SOE) and Public-Private-Partnership (PPP) to boost investments in the island nation.

Delays in formulating and enacting key structural legislation, specifically governing SOE reforms, PPPs, labor market flexibility, and modernizing the century-old Customs Ordinance, have emerged as major bottlenecks to Sri Lanka’s long-term economic competitiveness and fiscal sustainability.

The absence of a modernized legal framework for SOEs perpetuates fiscal leakages, inefficient governance, and persistent public sector debt burdens, while vague or outdated rules on PPPs and labor deter both domestic and foreign direct investment by creating regulatory ambiguity and rigid operational constraints.

Furthermore, the archaic Customs Ordinance of 1869 hinders trade facilitation, fosters administrative opacity, and creates revenue leakage risks at a time when export-led growth is critical.

Under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) arrangement, Sri Lanka has committed to prioritizing these legislative enactments.

Commenting on these laws, President Dissanayake said the government has been working on them and expects them to be enacted soon.

“Regarding the SOE law, I expect it will be presented to the Cabinet in about two weeks,” Dissanayake told the gathering at the launch of the Sri Lanka Economic and Investment Summit 2026 on Monday (12).

“The PPP law has been drafted and submitted to the Legal Draftsman’s Department, and we have received their recommendations.”

“Regarding labour law, about twelve different labour statutes currently exist. We are consolidating these into unified legislation. A draft bill has already been formulated, though reviewing and finalizing it will take some time.”

He said an agreement has been reached on the Customs Ordinance following extensive discussions involving the Treasury and the Customs Department.

“The proposed amendments to the Customs Ordinance are the most appropriate way forward,” he said.

“Those proposals have now been submitted to the Legal Draftsman’s Department, and we expect the bill to be finalized promptly. Most likely, all of these bills will be presented to Parliament by February.”

The IMF contends that establishing transparent, enforceable, and modern legal frameworks is essential to eliminate governance vulnerabilities, enforce fiscal discipline, improve revenue collection, and signal regulatory stability to foreign investors, thereby ensuring Sri Lanka’s post-default recovery transitions into sustainable macroeconomic growth. (Colombo/October 14/2026)

Continue Reading