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Friday October 9th, 2026

Trump pulls back from war with Iran

U.S. President Donald Trump speaks from the White House on January 08, 2020 in Washington, DC.

AFP – President Donald Trump pulled back from the brink of war with Iran on Wednesday, saying that Tehran appeared to be “standing down” after firing missiles — without causing casualties — at US troops based in Iraq.

In a televised address to the nation from the White House, Trump emphasized there were “no Americans harmed” in the ballistic missile salvo aimed at two bases.

While he promised to immediately impose “punishing” new economic sanctions on Tehran, Trump welcomed signs the Islamic republic “appears to be standing down” in the tit-for-tat confrontation.

The comments cooled what threatened to become an uncontrolled boiling over of tensions after Trump ordered the killing last Friday of a top Iranian general, Qasem Soleimani.

In New York, the Nasdaq stock market index surged to a record high of 9,129.24.

However, the US president, facing both an impeachment trial in Congress and a tough reelection in November, defended his targeting of a man seen by many as Iran’s second most influential official.

Soleimani, a national hero at home, was “the world’s top terrorist” and “should have been terminated long ago,” Trump said.

And although Trump ended his remarks with a call for peace, he opened by stating that he would never allow Iran to procure a nuclear weapon.

It was Trump’s 2018 withdrawal from a multinational agreement aimed at curbing Iran’s nuclear ambitions, and the reimposition of crippling economic sanctions against Tehran, which began an intensification of tensions between the two countries.

– Missiles blast bases –

Iran’s missiles targeted the sprawling Ain al-Asad airbase in western Iraq and a base in Arbil, both housing American and other foreign troops from a US-led coalition fighting the remnants of the Islamic State jihadist group.

Iran’s supreme leader Ayatollah Ali Khamenei, who earlier promised “revenge” for Soleimani, called the missiles a “slap in the face” against the United States.

He indicated there was more to come.

“The question of revenge is another issue,” Khamenei said in a televised speech.

Iraq’s military said it also sustained no casualties. But the strike highlighted the difficult position of Iraq, caught in an ever-deepening conflict between Trump and Iran.

The chairman of the US Joint Chiefs of Staff, General Mark Milley, dismissed suggestions that Iran did not mean to kill Americans with the missile barrage.

“I believe, based on what I saw and what I know, is that they were intended to cause structural damage, destroy vehicles and equipment and aircraft and to kill personnel. That’s my own personal assessment,” Milley told reporters.

Iraqi President Barham Saleh rejected Iraq being a “battlefield for warring sides.”

At the United Nations, Iran’s ambassador said in a letter to Secretary General Antonio Guterres that despite the missile firing, Iran respects Iraq’s territorial integrity.

Iran has powerful militia allies in Iraq and they said they intended to take revenge for Friday’s US drone attack, in which top Iraqi paramilitary commander Abu Mahdi al-Muhandis died alongside Soleimani.

Muhandis was the deputy head of Iraq’s Hashed al-Shaabi, a military network incorporated into the Iraqi state whose factions are backed by Tehran.

Late Wednesday two rockets, fired by unidentified forces, landed in the supposedly high-security Green Zone, where US and other embassies are located, security sources said.

AFP correspondents heard two loud detonations.

– Unusual brazenness –

The brazenness of Iran’s ballistic missile strike was unusual.

But as the dust settled, it appeared that Iran’s attack — coming soon after the burial of Soleimani at a funeral in front of vast crowds — might have been more symbolic than anything.

Foreign Minister Mohammad Javad Zarif indicated Iran was satisfied for now.

“Iran took and concluded proportionate measures in self-defense,” Zarif said on Twitter.

Reflecting deep concerns among Trump’s domestic opponents, the Democratic-led US House of Representatives scheduled a vote for Thursday on limiting the Republican president’s ability to wage war against Iran without congressional approval.

“The president has made clear that he does not have a coherent strategy to keep the American people safe, achieve de-escalation with Iran and ensure stability in the region,” House speaker Nancy Pelosi said.

But US Defense Secretary Mark Esper insisted the United States has restored some deterrence against Iran in the wake of the Soleimani killing.

“But we will see. Time will tell,” Esper said.
– US headaches in Iraq –

The apparent de-escalation in Iran did not remove pressure from approximately 5,200 US troops stationed across Iraq, where they face pro-Iranian Shiite militias and political opposition.

Paramilitary chief Qais al-Khazali — blacklisted as a “terrorist” by the US — said his side’s response to the United States “will be no less than the size of the Iranian response.”

But US Vice President Mike Pence told the CBS Evening News that “we’re receiving some encouraging intelligence that Iran is sending messages to those very same militias not to move against American targets or civilians.”

Angered at the US drone strike, the Iraqi parliament has called for expulsion of American troops, sparking embarrassing confusion at the Pentagon over how to respond.

– Airliner crash kills 176 –

Separately, a Ukraine International Airlines Boeing 737 crashed just outside Tehran after taking off bound for Kiev, killing all 176 people on board shortly after Iran launched its missiles towards Iraq.

There was no immediate suggestion of any link with the strikes but carriers including Air France, Royal Dutch Airlines and Lufthansa announced they were suspending flying though Iranian and Iraqi airspace as a precaution.

The US aviation regulator banned civil flights over Iraq, Iran and the Gulf, citing the potential for “misidentification” of aircraft.

Sri Lanka sells extra Rs8bn Treasury bills after auction

ECONOMYNEXT – Sri Lanka has sold 8,000 million rupees of treasury bills offered on tap at average rates of 9.44 percent and 9.95 percent, the public debt management office said, bringing the total of bills sold in the week to 88 billion rupees.

Total market subscription was 16,025 million rupees.

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

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

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Sri Lanka Treasury bill yields rise marginally, Rs80bn sold

On Wednesday (7) the debt office raised 80 billion rupees of 3, 6 and 12 month bills. (Colombo/Oct9/2026)

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Foreign investors buy Sri Lanka rupee bonds after selling for two weeks

ECONOMYNEXT – Foreign investors bought Sri Lanka rupee bonds for the first time in three weeks in the week ended on October 01, Central Bank data showed, amid a stable rupee.

With the latest inflows, the island nation has witnessed net foreign buying in 14 weeks in the last 16.

Offshore investors bought a net 1,821 million rupees (US$5.5 million) worth of Sri Lanka rupee bonds. They sold a net Rs.16.5 billion worth of rupee bonds in the last two weeks.

The inflows helped boost foreign holdings in government securities to 196.8 billion rupees.

Analysts said a stable local currency helped foreign buying last week.

The rupee had been steady for more than three years before the sharp depreciation in May with the Central Bank citing higher oil and vehicle imports amid a lingering conflict in the Middle East.

The rupee has fallen 6.2 percent through October 2 this year.

Globally, investors are cautious about economic growth due to the impact of the latest Middle East escalation.

The island nation has enjoyed a total inflow of around 57.5 billion rupees into rupee bonds so far this year, following a net inflow of 71.5 billion rupees last year.

The island nation has seen an uptick in inflation in the last six months following a nearly 50 percent hike in fuel prices.

The government raised fuel prices last week after reducing in the last weeks of June and August.

The Central Bank raised its key monetary policy rate by 100 basis points in May to curb inflationary pressure stemming from higher demand.

Before the May rate hike, the Central Bank kept its key policy rates steady since May 2025 after reducing them by 825 basis points over 24 months since June 2023 and foreign investors have been buying rupee bonds despite slight depreciation in the local currency (Colombo/October 08/2026)

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Sri Lanka rupee closes at 330.95/331.00 to US dollar spot, bond yields steady

ECONOMYNEXT – Sri Lanka’s rupee closed at 330.95/331.00 to the US dollar in the spot market on Thursday, from 330.90/331.00 the previous day, while bond yields closed broadly steady, dealers said.

A bond maturing on 01.08.2030 closed flat at 11.25/35 percent.

A bond maturing on 15.10.2030 closed at 11.30/40 percent, down from 11.35/40 percent.

A bond maturing on 01.02.2031 closed at 11.35/45 percent, down from 11.40/45 percent.

A bond maturing on 15.12.2032 closed at 11.75/80 percent, up from 11.70/80 percent.

A bond maturing on 15.10.2034 closed at 12.05/15 percent, up from 12.05/10 percent. (Colombo/Oct8/2026)

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Sri Lanka, IMF in talks over new “long term growth targeted” deal after March 2027: Minister

ECONOMYNEXT – Sri Lanka is in discussion with the International Monetary Fund (IMF) on a new programme after the completion of the current Extended Fund Facility (EFF), Deputy Finance Minister Anil Jayantha told Parliament on Thursday.

“The current IMF EFF program is on track to conclude successfully in March 2027, marking the completion of its economic reform and recovery efforts under the arrangements,” the Deputy Minister said in response to a question raised by the opposition.

“In parallel, discussions are currently underway regarding the options beyond the current program, reflecting a shift from crisis-driven support towards a more sustainable, long-term growth-targeted engagement model.”

Sri Lanka sought IMF deal after the island nation experienced an unprecedented economic collapse that culminated in its first-ever sovereign default in April 2022.

Severely depleted foreign exchange reserves, exacerbated by years of loose fiscal policies, high-profile tax cuts, organic farming mandates that damaged agricultural yields, and the economic blow dealt by the COVID-19 pandemic, left the island nation unable to service its $51 billion external debt stock.

The resulting crisis triggered severe shortages of fuel, medicines, and staple foods, hyperinflation exceeding 70%, and widespread public protests that ultimately forced the resignations of key government figures, including former President Gotabaya Rajapaksa.

The four-year, $3 billion EFF program was conditioned on a rigorous slate of macroeconomic and structural reforms, including tax hikes, energy cost-reflective pricing, expenditure controls, and strict central bank independence.

Central to the arrangement was a complex sovereign debt restructuring process, requiring the island nation to negotiate bilateral debt relief with major sovereign creditors, such as China, India, and Paris Club members, alongside commercial international sovereign bondholders.

The implementation of the EFF has since driven a significant macroeconomic turnaround, marked by a stabilizing exchange rate, a rebuild of gross official foreign exchange reserves, and a return to positive GDP growth.

However, maintaining compliance with program targets has generated considerable social and political friction.

Demands for broader anti-corruption measures, tax fairness, and enhanced social safety nets remain high as the government balances strict IMF revenue targets against domestic pressures to alleviate the elevated cost of living. (Colombo/October 08/2026)

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Sri Lanka stocks close down 1.38-pct; LMF crossing pushes turnover

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed lower on Thursday, CSE data showed, with the benchmark All Share Price Index falling 1.38 percent.

The ASPI was down 283.21 points at 20,234.34, while the more liquid S&P SL20 was down 0.82 percent, or 47.82 points, at 5,768.58.

Positive contributors to the ASPI were HNB Life (up 3.04 percent at 144.25 rupees), Renuka Holdings (up 2.16 percent at 37.90 rupees), Odel (up 2.06 percent at 9.90 rupees), and Hayleys (up 0.22 percent at 223.00 rupees).

Carson Cumberbatch (down 3.39 percent at 676.25 rupees), Distilleries Company of Sri Lanka (down 2.85 percent at 51.10 rupees), Hemas Holdings (down 2.56 percent at 30.50 rupees), Dialog Axiata (down 1.34 percent at 44.10 rupees), and Hatton National Bank (down 0.99 percent at 375.50 rupees) were top negative contributors.

Market turnover was 2.74 billion rupees.

High turnover was largely driven by crossing transactions, with Lanka Milk Foods recording crossings of about 1 billion rupees and Sunshine Holdings seeing a crossing of around 300 million rupees. (Colombo/Oct08/2026)

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Sri Lanka’s SEC urges public not to deposit, invest in Quantum AI Limited  

ECONOMYNEXT – Sri Lanka’s Securities and Exchange Commission (SEC) has warned the public in dealing with a company called Quantum AI Limited for trading and investment and urged them not to deposit any funds.

The regulator, on its X platform, stated it “wishes to inform the public that Quantum AI Limited is not licensed, registered, or authorized by the SEC to conduct securities trading, investment services, or any other regulated capital market activities in Sri Lanka.”

“The public is strongly advised not to deposit funds, invest, or engage in any trading or investment activities through Quantum AI Limited.”

“Before investing, always verify that the entity is duly licensed or registered by the SEC. Protect your investments. Deal only with SEC authorized market intermediaries.” 

Officials from Quantum AI Limited were not immediately available for comment on the SEC’s statement. 

Sri Lanka has increasingly seen illegal firms taking deposits and investments while promising higher returns.

Last week, the Central Bank warned the public against investing in plantation companies that are not regulated by it. (Colombo/October 08/2026) 

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