Sri Lanka rupee closes weaker to dollar; bond yields edge up

Tuesday May 5, 2026 5:46 pm

ECONOMYNEXT- Sri Lanka’s rupee closed at 319.90/320.40 to the US dollar in the spot market on Tuesday, from 319.60/320.00 the previous day, dealers said, while bond yields edged up.

A bond maturing on 01.07.2028 closed at 9.75/85 percent.

A bond maturing on 15.10.2029 closed at 10.05/15 percent, up from 9.95/10.05 percent.

Follow the EconomyNext WhatsApp Channel

Get breaking updates, instant alerts, and exclusives.

Join Now

A bond maturing on 01.07.2030 closed flat at 10.20/25 percent.

A bond maturing on 01.06.2033 closed at 11.00/10 percent.

A bond maturing on 15.06.2034 closed at 11.25/30 percent, up from 11.20/25 percent.

A bond maturing on 15.06.2035 closed at 11.25/32 percent.

100,000 million rupees Treasury bills are to be issued through an auction on Wednesday. (Colombo/May5/2026)

Tuesday May 5, 2026 6:30 pm

ECONOMYNEXT – Sri Lanka may face a shortage of medicines as the pharmaceutical industry is facing a challenge due to the regulator failing to allow price revisions despite the rupee fall and amid restrictive price caps, industry stakeholders say.

The Sri Lanka rupee has tumbled with the Central Bank’s indicative exchange rate falling 5.6% in the last six months – from 302.6 per US dollar in October 2025 to 319.5 this week.

Sri Lanka is heavily dependent on medicines imports.

The island nation imported US$ 667 million worth drugs last year, accounting for approximately 85% of the total medicinal drug market.

The industry regulator, National Medical Regulatory Authority (NMRA), allowed the last price revision in July 2023, industry stakeholders say.

“Because there is a huge exchange increase, the industry is due for a price increase,” Shantha Bandara, President of the Sri Lanka Chamber of the Pharmaceutical Industry (SLCPI), told EconomyNext.

“All the other products have gone up except medicine which went down significantly. If that doesn’t happen, we are unable to place orders.”

The NMRA guidelines state that if the exchange rate fluctuates by more than 5%, rise or fall, the Authority may review and revise maximum retail prices (MRPs) of drugs.

Follow the EconomyNext WhatsApp Channel

Get breaking updates, instant alerts, and exclusives.

Join Now

Bandara said the last revision, a 16% price cut, was done in July 2023 for selected drugs.

The SLCPI and Sri Lanka Pharmaceutical Manufacturers’ Association (SLPMA) raised concerns over delay in upward price revision, noting that the “market-blind” controls make it impossible to sustain operations.

Nalin Kannangara, the president SLPMA stated that the cost of medicines has risen by up to 25% due to exchange rate depreciation and regional instability in the Middle East.

“Now, because of this Middle East crisis, there can be a shortage of finish pharma in the market,” Kannangara told EconomyNext.

“Imports now have a lot of challenges because of the freight issues, insurance and exchange risks associated.”

Though there is a price formula in place, the exchange rate is the main component of that, stakeholders say.

Repeated attempts to contact NMRA for comments failed, as it did not respond to calls or emails.

Health Minister Nalinda Jayatissa, however, acknowledged the pressure due to the rupee depreciation.

“There is a 5% [provision]. If there is a slight increase in the dollar, a price increase must be granted,” Jayatissa told EconomyNext.

He said the government may allow an increase in the “ceiling price” for drug importers and not the retail price. (Colombo/May5/2026)

Tuesday May 5, 2026 4:05 pm

ECONOMYNEXT – Sri Lanka Customs exceeded its April target by 30.5%, while revenue in the first four months jumped around 50 percent compared to the same period last year, official data showed.

Customs’ April revenue target was set at 181.2 billion rupees. However, the revenue-collecting body collected 236.5 billion rupees in the month, exceeding the target by 30.5%, official data showed.

It also exceeded the cumulative target in the first four months by 33.7% to achieve 919.3 billion rupees.

Customs has been accelerating container clearance since January after the devastation in November impacted usual activities.

Total revenue collected by Customs jumped 49.8% in the first four months of this year compared to the same period last year.

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.

Follow the EconomyNext WhatsApp Channel

Get breaking updates, instant alerts, and exclusives.

Join Now

Customs has set a revenue target of 2,207 billion rupees for this year, 13.5% less than last year as it expects a significant decline in car imports. Data showed it achieved 41.7% of this year’s target in the first four months.

Sri Lanka Customs’ revenue jump is largely due to stronger enforcement, improved valuation practices, and a rebound in import volumes after years of contraction.

Following the 2022 economic crisis, imports fell sharply as the country imposed restrictions to conserve foreign exchange.

However, with the stabilization of reserves, the relaxation of certain import controls, and a steady recovery in consumer demand, customs collections from import duties, excise, and other levies have risen.

Officials note that tighter monitoring of under-invoicing and misdeclaration of goods has also contributed to boosting state revenue.

The combined effect of increased import activity, currency movements, and stricter enforcement has positioned Customs as one of the top revenue sources for the Treasury in 2025, providing a vital cushion as the state works to meet fiscal targets under the IMF-supported program. (Colombo/May 05/2026)

Tuesday May 5, 2026 3:50 pm

ECONOMYNEXT — Sri Lanka’s cabinet has approved the acquisition of land for the long-delayed development of the Kelani Valley (KV) railway line, from Maradana to Avissawella, minister Nalinda Jayatissa said.

The project, which aims to modernize the narrow-gauge corridor, will involve land acquisition across seven Divisional Secretariat Divisions, including Colombo, Thimbirigasyaya, Sri Jayewardenepura Kotte, Maharagama, Homagama, Padukka, and Seethawaka.

The project seeks to secure the necessary right-of-way for a track that has long suffered from speed restrictions and aging infrastructure.

The government is moving to finalize the preliminary phases of land acquisition, Cabinet Spokesperson Nalinda Jayatissa told reporters.

Follow the EconomyNext WhatsApp Channel

Get breaking updates, instant alerts, and exclusives.

Join Now

“At present, this is in the stage of identifying and acquiring lands; funds have been allocated for that purpose, and those activities have been expedited,” Jayatissa said.

The cabinet had previously granted in-principle approval for the development and the resettlement of families currently living within the railway’s lands. Financial provisions have already been earmarked to compensate and relocate those affected by the expansion. (Colombo/May5/2026)

Tuesday May 5, 2026 3:45 pm

ECONOMYNEXT — Sri Lanka’s Ministry of Power and Energy is implementing technical reforms, including the procurement of specialized software and battery storage systems, to prevent a recurrence of the countrywide power outage experienced in February 2025, Energy Minister Anura Karunathilaka told Parliament.

Two committees — one from the ministry and another from the Ceylon Electricity Board (CEB) — appointed to investigate the failures of February 9, 2025, made 12 recommendations to secure the national grid against future instability, he said.

“We have instructed the Ceylon Electricity Board to implement the recommendations of the ministry committee immediately to ensure system stability,” Karunathilaka said.

The CEB is procuring “RE-desk” software for its System Control Center, he said, a tool designed to monitor and control the growing number of renewable energy plants connected to the grid.

Follow the EconomyNext WhatsApp Channel

Get breaking updates, instant alerts, and exclusives.

Join Now

A new software system for forecasting renewable energy production has already been purchased and is now operational, he said.

To address the physical stability of the system, the government has started setting up battery energy storage systems (BESS), he said, and steps are also being taken to install a synchronous condenser at the New Habarana Grid Substation with funding from the World Bank.

Karunathilaka said the ministry is paying attention to periods of low electricity demand, such as Sundays and public holidays, which can pose risks to grid balance. A special operational policy is now in place to increase the “inertia” of traditional generation systems during these times to keep the frequency stable.

The CEB has also been instructed to update and publish protection parameters and re-evaluate load-shedding settings to better reflect the current energy mix. A four-member monitoring committee has been appointed to oversee the progress of these various interventions. (Colombo/May5/2026)

Tuesday May 5, 2026 3:31 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Tuesday due to some selling pressure, brokers said.

“Escalation in the Middle East caused panicked retail selling,” Dimantha Matthew, Chief Research and Strategy Officer at First Capital Holdings said.

Earlier today, US Navy helicopters sank 6 Iranian craft near the Strait of Hormuz following Iranian attacks on UAE oil infrastructure and commercial vessels.

The CSE’s All Share Price Index was down 0.49 percent, or 110.70 points, at 22,584. The S&P SL20 was down 0.31 percent, or 19.36 points, at 6,225.

“The current dip is also coming with the selling pressure from bank counters,” Matthew added.

Follow the EconomyNext WhatsApp Channel

Get breaking updates, instant alerts, and exclusives.

Join Now

Digital Mobility Solutions (up 1.31 percent at 155 rupees), Ceylon Grain Elevators (up 1.97 percent at 467 rupees), Melstacorp (up 0.27 percent at 185.50 rupees), and Ceylon Cold Stores (up 0.83 percent at 121 rupees) were top positive contributors to the ASPI.

CT Holdings (down 2.73 percent at 580 rupees), Hayleys (down 1.07 percent at 230.50 rupees), Sampath Bank (down 0.50 percent at 148.75 rupees), and Hemas Holdings (down 1.52 percent at 32.50 rupees) were top negative contributors.

Market turnover was 2.15 billion rupees.

“Turnover was pushed by crossings in Digital Mobility Solutions and Commercial Bank.”

Crossings were seen in John Keells Holdings (2.01 million), Commercial Bank of Ceylon (250,000), Chevron Lubricants Lanka (105,000), Digital Mobility Solutions (500,000), LB Finance (150,000).

Colombo Dockyard reported a loss of 428.1 million rupees for the quarter ended March 31, 2026, narrowing from a loss of 634.4 million rupees in the corresponding period last year. The share closed at 1,803.50 rupees, up 0.19 percent. (Colombo/May05/2026)

Tuesday May 5, 2026 3:07 pm

ECONOMYNEXT – Sri Lanka’s Cabinet of Ministers have approved a proposal to award tenders for purchasing cabs and tractors at a total cost of 1,458.75 million rupees to United Motors Lanka, Toyota Lanka, and DIMO, minister Nalinda Jayatissa said.

“The vehicles are for the Department of Wildlife Conservation to be used for wild elephant management duties and other field duties,” Jayatissa told reporters.

Bids were invited for the purchase of 16 double cabs, 84 single cabs and 9 4-wheel tractors.

“Cabinet approved the proposal to purchase the vehicles from the lowest bidders.”

The procurement of 16 double cabs was awarded to United Motors Lanka PLC at 300 million rupees (excluding taxes).

The tender for 84 single cabs was awarded to Toyota Lanka (Pvt) Ltd at 1,134 million rupees.

The tender for 9 4-wheel tractors was given to Diesel & Motors Engineering PLC 24.75 million rupees. (Colombo/May5/2026)