Economy

Sri Lanka rupee bonds see initial interest from foreign investors

Friday September 23, 2022 8:31 am

ECONOMYNEXT – Sri Lanka has seen initial interest by at least one foreign investor in rupee bonds, data shows as interest rates went up and the external sector started to show stability with reduced money printing.

In the week to September 14, foreign holdings of rupee bonds went up by about 3 billion rupees to 7.9 billion US dollars.

Sri Lanka saw a mass-exit of rupee bond holders amid increased monetary instability seen under flexible inflation targeting with the rupee falling from 131 to 182 to the US dollar from 2015 to 2019 an unusual liquidity injections from 2020 for monetary stimulus.

Sri Lanka has a 70-year history of using central bank tools to suppress rates as domestic credit picks up and creating balance of payments deficits. Sri Lanka defaulted for the first time in 2022 after becoming a market access country.

Market rates are around 25 to 30 percent. Sri Lanka struck a staff level deal with the IMF in September and is negotiating with creditors to re-structure debt.

The central bank has now allowed market rates to go up and efforts are also made to reduce public sector credit with tax hikes and market pricing prices of state enterprises, bringing some stability to the external sector.

Soft-pegged central banks which collect reserves, which do do not raise rates in step with the US to curb domestic credit are now seeing pressure on their currencies as the US raises rates.

Sri Lanka saw the first forex shortages in from around 1951 as the Fed raised rates under Wade McCade at the instigator of Marriner Eccles, leading to the first BOP deficits and tightened exchange control laws in 1952. Sri Lanka set up a soft-peg in 1950 with US technical support.

It is not clear whether the interest seen in Sri Lanka rupee bond is an isolated or the start of a trend.

Sri Lanka is re-structuring its debt and there are concerns that it will spread to domestic bonds which has seen values fall by half due to depreciation.

The resulting inflationary revenues (so-called Inflation and Financial Repression effect) bring automatic debt sustainability at the expense of the rupee bond holders and the general public’s disposable income.

There has also been some inflows into stocks. (Colombo/Sept23/2022)

Markets

Sri Lanka stocks trend up, ASPI gains 0.60-pct

Friday October 16, 2026 10:36 am

ECONOMYNEXT — Sri Lanka’s Colombo Stock Exchange opened up on Friday, CSE data showed, with the benchmark All Share Price Index moving up 0.60 percent.

The ASPI was up 119.48 points at 20,090.63, while the more liquid S&P SL20 was up 0.63 percent, or 36.09 points, at 5,735.11.

Positive contributors to the ASPI were Dialog Axiata (up 3.29 percent at 43.90 rupees), Commercial Bank of Ceylon (up 0.51 percent at 199.00 rupees), Sri Lanka Telecom (up 4.54 percent at 82.90 rupees), and Sampath Bank (up 1.45 percent at 140.00 rupees).

Distilleries Company of Sri Lanka (down 1.57 percent at 50.00 rupees), Ambeon Holdings (down 3.98 percent at 31.40 rupees), Tokyo Cement Company (Lanka) (down 2.28 percent at 72.80 rupees), Singer (Sri Lanka) (down 0.56 percent at 70.60 rupees), and Ceylon Tobacco Company (down 0.56 percent at 1,768.00 rupees) were top negative contributors.

Market turnover was 170.32 million rupees. Capital goods led turnover with 36.64 million rupees. (Colombo/Oct16/2026)

Bonds & Forex

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

Friday October 16, 2026 9:52 am

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)

Economy

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

Thursday October 15, 2026 6:14 pm

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)

Economy

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

Thursday October 15, 2026 6:05 pm

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)

Bonds & Forex

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

Thursday October 15, 2026 6:00 pm

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)

Bonds & Forex

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

Thursday October 15, 2026 5:47 pm

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)