ECONOMYNEXT – Sri Lanka’s inflation target for the next three years through October 2029 will be maintained at 5 percent and the agreement was signed between the government and the Central Bank, the monetary authority said in a statement on Friday.

The new  Monetary Policy Framework Agreement (MPFA) in terms of the latest Central Bank of Sri Lanka Act was signed between President Anura Kumara Dissanayake in his capacity as the Minister of Finance and Central Bank Governor Nandalal
Weerasinghe on Thursday (01), it said.

As per the new MPFA, the Central Bank shall aim to maintain quarterly headline inflation rate at 5% with a margin of ±2 percentage points. This means the Central Bank has to maintain the inflation between 3% and 7%.

The move comes at a time when the Central Bank has failed to maintain the inflation target at its upper limit of 7 percent in the last three months. The Bank has blamed =higher energy price for the deviation following the Middle East conflict.

As per the new Central Bank Act, the inflation target and related parameters are reviewed once in every three years, or at shorter intervals if exceptional circumstances so warrant.

“As part of the review, the Central Bank undertook a comprehensive technical assessment that considered  Sri Lanka’s economic structure, historical and empirical evidence, monetary policy considerations, the credibility of the framework, stakeholder views, and international experience and practices,” the Central Bank said in a statement.

“Based on the findings of the review, the Central Bank communicated its proposal to the Ministry of Finance. The Ministry, after careful consideration, accepted the recommendation.”

Critics have argued that a 5% inflation target is too high and it should be reduced to 2%. However, the Central Bank has said such reduction would have an adverse impact on the country’s economic growth. (Colombo/October 02/2026)

ECONOMYNEXT – Sri Lanka’s rupee closed at 330.55/65 to the US dollar in the spot market on Friday, from 330.60/70 the previous day, while bond yields closed broadly steady, dealers said.

A bond maturing on 01.08.2030 closed at 11.15/20 percent, up from 11.10/18 percent.

A bond maturing on 15.10.2030 closed flat at 11.20/25 percent.

A bond maturing on 01.02.2031 closed at 11.25/30 percent, up from 11.22/27 percent.

A bond maturing on 15.12.2032 closed at 11.67/75 percent, up from 11.65/75 percent.

A bond maturing on 15.10.2034 closed at 11.99/12.05 percent, up from 11.95/12.00 percent.

At the end of September, the rupee had depreciated by 6.3 percent against the US dollar on a year-to-date basis, the central bank said. (Colombo/Oct2/2026)

ECONOMYNEXT – Visitor numbers into Sri Lanka fell 0.26 percent in September 2026, compared to a year ago, official data showed.

Total arrivals in September were 158,557 compared to 158,971 in the same month last year.

India continued to be the top source with 51,931 visitors, making up a 32 percent of total arrivals.

There were 11,722 visitors from China and from 10,951 from Australia.

There have been 1,693,679 visitors to the island so far this year.

Tourist arrivals fell 3.3 percent in the month compared to last August.

Total arrivals during January-August 2026 fell 2 percent, compared to the corresponding period of 2025.

Tourism earnings were estimated at 264 million dollars in August, a 2.1 percent increase from a year earlier.

But total tourism earnings during January-August 2026 fell 10 percent to 2.1 billion dollars, compared to 2025.(Colombo/Oct2/2026)

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed lower on Friday, CSE data showed, with the benchmark All Share Price Index falling 0.33 percent.

The ASPI was down 68.26 points at 20,812.64, while the more liquid S&P SL20 was down 0.25 percent, or 14.93 points, at 5,886.72.

Positive contributors to the ASPI were Citizens Development Business Finance (up 5.15 percent at 34.70 rupees), Richard Pieris and Company (up 2.31 percent at 26.60 rupees), PGP Glass Ceylon (up 1.63 percent at 56.10 rupees), and Sri Lanka Telecom (up 1.43 percent at 85.10 rupees).

Carson Cumberbatch (down 2.67 percent at 710.00 rupees), Singer (Sri Lanka) (down 3.05 percent at 76.20 rupees), SMB Finance (down 8.33 percent at 1.10 rupees), and Commercial Bank of Ceylon (down 0.49 percent at 202.00 rupees) were top negative contributors.

Market turnover was 873.38 million rupees. The S&P/CSE Banks sector led turnover with 244.40 million rupees, while Real Estate Management and Development recorded 177.44 million rupees.

“Trading started off extremely slowly before picking up slightly in the final hour, with crossings in Sampath Bank, LIOC, and NDB accounting for roughly 350 to 400 million rupees—almost half the day’s total turnover,” said Raynal Wickremeratne, Head of Research and Strategy at NDB Securities. (Colombo/Oct02/2026)

ECONOMYNEXT – Sri Lanka lender Sampath Bank has launched a community-powered book search platform at the Colombo International Book Fair allowing visitors to find the books they are looking for across the fair’s 150+ stalls.

Sampath Book Finder, Sri Lanka’s first community-powered book discovery platform, also allows readers to recommended books they encounter by sharing the title, publisher, hall and stall number.

It turns “the collective knowledge of readers into a real-time digital solution, empowering them to find what they are looking for, discover something new and help others do the same,” Milinda Weerasinghe, Chief Marketing Officer, Sampath Bank PLC, said.

When a book proves difficult to locate, visitors can access bookfairtracker.com or scan the designated QR code and submit a request to the community, allowing readers who have already spotted the title to share its location and help others find it without having to search stall after stall.

SampathCards offers 25 percent cashback for Sampath GPay customers on their purchases and 3 months 0% instalment plans for book purchases at the fair.

The Colombo International Book Fair, organised by the Sri Lanka Book Publishers’ Association, continues at BMICH until 4 October, from 9 am to 9 pm daily. (Colombo/Oct2/2026)

ECONOMYNEXT – The Asian Development Bank (ADB) will provide a 100 million dollar results-based loan for Sri Lanka to improve its technical and vocational education and training (TVET) system and increase women’s employment in nontraditional jobs, the global lender said.

The financing consists of a $50 million regular loan, a $50 million concessional loan, and a $500,000 technical assistance grant from ADB.

The Skills Development System Transformation Program aims to equip more youth with industry-relevant skills, strengthen the country’s competitiveness, and increase women’s employment opportunities in nontraditional jobs such as automotive technology, engineering, information and communications technology, construction, and renewable energy.

“A skilled workforce is essential to Sri Lanka’s long-term economic transformation and competitiveness,” said ADB Country Director for Sri Lanka Shannon Cowlin.

“This program will help create stronger pathways from education to employment by making training more responsive to industry needs, expanding opportunities for young people and women, and ensuring that graduates have the skills required by a modern and evolving economy.”

Sri Lanka’s economy faces skills shortages in priority sectors, high youth unemployment, and low female labor force participation, ADB said, with employers reporting difficulty finding workers with the skills needed in a changing economy.

The nationwide program will be implemented from 2027 to 2031.

It is expected to benefit over 100,000 young people with better access to quality, employment-oriented training.

The program will provide expanded career guidance for secondary school students, enhanced capacity-building activities for teachers, and improved coordination between schools and training institutions, ADB said.

The program will establish a center of excellence for automotive technology, introduce a hub-and-spoke training model across all 9 provinces, upgrade learning facilities, and launch new industry-aligned courses in priority sectors.

It will also deepen partnerships between training providers and employers through workplace-based learning, industry participation in skills assessment and certification for learners, and stronger mechanisms for private sector engagement.

The program will improve quality assurance through a national accreditation system, performance-based financing mechanisms, and a digital training management information system that will align skills development with labor market demand. (Colombo/Oct2/2026)