ECONOMYNEXT – Sri Lanka’s rupee was quoted weaker at 310.10/20 to the US dollar in the spot market Wednesday, from 310.00/10 the previous day, dealers said, while bond yields opened broadly steady.
Analysts have warned the central bank not to push the rupee down by over-purchasing dollars above its deflationary policy which will eventually push up energy and food costs, even when US monetary policy is relatively benign.
When the central bank buys dollars at 310 to the US the market is signaled to push the rupee down, analysts say.
Unlike other buyers like the Treasury or ordinary importers, central bank purchases create new money, and the rupee stays down from heavily one-sided purchases.
To stop the new rupees from boomeranging on the forex markets, the rupee has to be extinguished, sterilized through deflationary policy.
The central bank has busted the rupee from 4.77 to 310 to the US dollar escaping accountability, especially after 1980.
The telegraphic transfer rates for the dollar were 306.5000 buying, 313.5000 selling; the British pound was 413.1563 buying, and 424.5181 selling, and the euro was 356.3883 buying, 367.7515 selling.
A bond maturing on 15.12.2028 was quoted at 9.25/30 percent, up from 9.20/30 percent.
A bond maturing on 15.12.2029 was quoted at 9.70/72 percent, down from 9.70/73 percent.
A bond maturing on 01.07.2030 was quoted at 9.75/78 percent, down from 9.77/80 percent.
A bond maturing on 01.10.2032 was quoted at 10.32/40 percent, up from 10.30/40 percent.
A bond maturing on 01.11.2033 was quoted at 10.52/60 percent.
An auction of 100,000 million rupees Treasury bills was ongoing. (Colombo/Jan7/2026)