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View all(65)📈 LKR Rebounds as US Dollar Selling Rate Eases Below Rs. 340
The Sri Lankan Rupee (LKR) showed significant volatility but managed to regain strength today (22), with the US Dollar (USD) selling rate dropping below the Rs. 340 mark at several commercial banks after a recent sharp surge. • Overall Movement: The recovery comes a day after the USD reached a peak of Rs. 354 yesterday (21), which had marked a steep Rs. 12 increase within a single day. • Commercial Bank Rates: Selling rates varied across major financial institutions this afternoon: • Nations Trust Bank: Rs. 336.49 • Bank of Ceylon: Rs. 336.50 • People’s Bank: Rs. 338.86 • Hatton National Bank: Rs. 340.00 • Sampath Bank: Rs. 340.50 • Commercial Bank: Rs. 342.50 • Economic Context: This stabilization offers temporary relief for macroeconomic stability, impacting import costs and inflation dynamics after a period of rapid, short-term currency depreciation.
📈 Global Markets Rise Amid US-Iran Peace Talk Hopes
Global markets advanced on Friday as investors closely monitored US-Iran peace talks to end a nearly three-month-old Middle East war, though key disagreements persist over Tehran's uranium stockpile and control of the critical Strait of Hormuz waterway. Prolonged energy disruptions continue to fuel global inflationary pressures and reshape interest rate expectations. • Equities & Currencies: MSCI’s Asia-Pacific index rose 0.3%, Japan’s Nikkei gained 2%, and US futures edged up 0.2%. The US Dollar index held near a six-week high at 99.247, supported by safe-haven demand and rising Treasury yields, while the Euro neared a six-week low at $1.1614. • Energy Markets: Oil prices remain volatile but well above pre-war levels. Brent crude rose 2% to US$ 104.71 a barrel (down 6% for the week), while US WTI grew 1.66% to US$ 98.01 a barrel. • Macroeconomic Impact: The borderless energy shock has rewired the monetary policy outlook. Traders are now pricing in potential US Federal Reserve interest rate hikes by year-end, a sharp reversal from pre-war expectations of two rate cuts. Meanwhile, Japan's core inflation slowed to a four-year low in April, complicating the Bank of Japan's rate-hike path.
📈 Secondary Bond Market Activity & Yields Rise Amid Cautious Sentiment
• Market Sentiment: Yields continued to increase driven by heightened geopolitical risks in the Middle East and elevated crude oil prices, keeping investors cautious. • Bond Yield Movements: Significant upward shifts were recorded on key maturities compared to previous day closings: - 2028 (01.07.28): Traded at a high of 10.55% (vs 10.05/20%). - 2032 (01.10.32 & 15.12.32): Traded at a high of 11.48% (vs 11.00/15%). - 2033 (01.06.33): Traded at a high of 11.60% (vs 11.25/45%). - Other maturities ranging from 2026 to 2037 changed hands between 8.45% and 11.60%. • Money Market & Liquidity: - Net liquidity surplus stood at Rs. 158.93 Bn. - CBSL drained Rs. 100.00 Bn via an overnight repo auction at a weighted average rate of 7.75%. - Central Bank deposits (SDFR at 7.25%) stood at Rs. 128.42 Bn, while SLFR withdrawals (at 8.25%) totaled Rs. 69.49 Bn. - Weighted average rates for overnight Call money and REPO were 7.90% and 7.94% respectively. • Forex Market: The USD/LKR spot contracts traded within a broad range of Rs. 331.00 to Rs. 348.00, with a total traded volume of US$ 24.00 Mn recorded for May 20.
📉 Lankan Rupee Hits Lowest Since March 2023 as USD Selling Rate Reaches Rs. 354
• Exchange Rate Movements: The Sri Lankan rupee depreciated sharply today (May 21), with the US dollar selling rate breaching the Rs. 350 mark for the first time in over three years to hit Rs. 354.03. The buying rate was recorded at Rs. 342.63, according to the Central Bank of Sri Lanka. • Day-on-Day Comparison: This marks a significant drop from yesterday (May 20), when the buying rate stood at Rs. 332.23 and the selling rate was at Rs. 342.70. • Key Drivers: Market analysts and official data attribute the sudden pressure on the currency to a mix of domestic factors and global economic uncertainty, heavily influenced by the ongoing Middle East conflict.
📈 T-Bill Rates Edge Up in Undersubscribed Rs. 140 Bn Auction
The weekly Treasury Bill auction was undersubscribed, reversing the previous week's yield declines amid a bearish secondary bond market. • Auction Overview: Raised only 48.03% (Rs. 67.24 Bn) of the Rs. 140.00 Bn on offer during the first phase. The bid-to-offer ratio stood at 1.66 times. • Yield Rates: - 91-day tenor: Up 5 bps to 8.18% - 182-day tenor: Up 2 bps to 8.25% - 364-day tenor: Unchanged at 8.49% • Secondary Market: Remained bearish for the third consecutive session due to global bond pressures, Middle East geopolitical tensions, and elevated crude oil risks. Notable trades included the 2028 maturity at 10.00%–10.15% and the 2036 maturity at 11.50%. • Money Market: Net liquidity surplus stood at Rs. 168.33 Bn. CBSL's Domestic Operations Department drained Rs. 75.00 Bn via an overnight repo auction at a weighted average rate of 7.75%. Overnight call money and repo rates averaged 7.87% and 7.91% respectively. • Forex Market: The USD/LKR spot contracts traded between Rs. 329.25 and Rs. 330.25, with a total traded volume of US$ 41.50 Mn recorded on May 19.
CSE Ends Down Sharply as LKR Depreciation Weighs on Market Sentiment 📉
The Colombo stock market recorded sharp losses yesterday, driven by investor concerns over a depreciating Sri Lankan Rupee (LKR) against the USD, macroeconomic uncertainties, and global supply shock headwinds from geopolitical tensions. • Overall Figures: ASPI: Down 2.28% (-509.02 points) to close at 21,789.05. S&P SL20: Down 1.87% (-114.77 points) to close at 6,034.00. Market Turnover: Reached over Rs. 3.8 Bn with nearly 175.7 Mn shares traded. Foreign Institutional Activity: Net foreign inflow of Rs. 39 Mn, marking a second consecutive session of net buying. • Sector & Stock Breakdowns: Capital Goods: Led market turnover with a 36% share, though the sector index shed 1.68%. Top sector contributors included John Keells Holdings (down Rs. 0.50 to Rs. 19.80), Hayleys (down Rs. 2.00 to Rs. 234.00), and Access Engineering (down Rs. 0.60 to Rs. 74.80). Banking & Diversified Financials: Combined to contribute 24% of daily turnover. The banking sector index decreased by 1.49%, heavily dragged by Hatton National Bank (non-voting) which fell Rs. 9.25 to Rs. 329.25. Top Negative Contributors: Melstacorp (MELS), Sampath Bank (SAMP), JKH, Ceylinco Insurance (CINS), and HNB emerged as the largest drags on the ASPI. • Investor Participation: High Net Worth (HNW) and institutional investor activity remained subdued but focused on JKH, Hayleys, and Access Engineering. Retail investor activity was notably strong, with high interest observed in counters like Citrus Leisure, Co-Operative Insurance Company, and Browns Investments.
📈 Rupee Depreciation Reflects Global Trends, Boosts Export Competitiveness: JAAF
The Joint Apparel Association Forum (JAAF) stated that the recent depreciation of the Sri Lankan rupee is driven by global pressures—including Middle East instability, high fuel prices, and rising shipping costs—rather than domestic economic weakness. Key Highlights: • Regional Currency Movements: The Sri Lankan rupee depreciated by 4.8% against the US dollar, performing better than regional peers such as the Indian rupee (-6.4%), Nepalese rupee (-6.2%), and Indonesian rupiah (-5.2%). • Economic Impact: JAAF and the Central Bank of Sri Lanka (CBSL) emphasize that a weaker rupee enhances export competitiveness, protects jobs, and strengthens foreign exchange earnings and national reserves. • Apparel Sector Significance: The apparel & textiles sector remains a critical pillar of Sri Lanka's economy, generating approximately US$ 5.00 Bn annually and providing employment to around 350,000 people. • Strategic Outlook: JAAF urges a focus on maintaining market confidence, avoiding speculation, and supporting policy stability to protect Sri Lanka's ongoing economic recovery.
📈 Sri Lankan Rupee Hits Record Low Against US Dollar
The Sri Lankan rupee has depreciated sharply against the US dollar, reaching its lowest valuation in over three years based on official exchange rates. • Currency Performance: The Central Bank of Sri Lanka reported today (May 20, 2026) that the US dollar buying rate has climbed to Rs. 332.08, while the selling rate has reached Rs. 342.70. • Historical Context: This marks the highest buying and selling rates recorded for the US dollar since March 20, 2023, reflecting sudden downward pressure on the local currency. • Economic Impact: A weakening rupee typically increases the cost of imports, directly impacting core sectors like apparel & textiles (raw materials) and fuel, which can escalate domestic inflationary pressures.
📈 Rupee Weakens Against US Dollar as Spot Market Trades Above Rs. 328
• Exchange Rate Movements: The Sri Lankan rupee weakened in the spot market, with the indicative exchange rate closing at Rs. 326.92 per dollar compared to the previous close of Rs. 325.62. Spot contracts traded within a higher range of Rs. 327.85 to Rs. 328.90 during the session (up from Rs. 326.50 to Rs. 327.50 previously). • Year-to-Date Performance: As of May 18, the rupee has depreciated by approximately 4.8% against the US dollar. However, official statements note this decline remains lower than that of several regional economies. • Key Drivers of Depreciation: Global factors: Escalating Middle East tensions, rising global oil prices, and overall global uncertainty leading to a stronger US dollar. Domestic factors: Heightened importer demand for foreign exchange, delayed conversion of export earnings, and market speculation. • Policy Stance: The Central Bank of Sri Lanka continues to maintain a flexible exchange rate policy, leaving the currency's value to be determined by market demand and supply dynamics.
📉 Bond Market Yields Spike Ahead of Rs. 140 Bn T-Bill Auction
The secondary bond market turned bearish for a second consecutive day, with yields climbing due to selling pressure and global market trends. Defensive trading was driven by geopolitical uncertainties in the Middle East and elevated crude oil prices, though healthy volumes were maintained via block transactions. Key Market Highlights: • Bond Yield Movements: Short-term: 01.08.26 maturity traded at 8.25%. Medium-term: 2028 maturities hit 9.95%–10.00%, while 2029 maturities moved up to 10.05%–10.30%. Long-term: 2034–2036 maturities saw elevated yields ranging between 11.32% and 11.48%. • Upcoming T-Bill Auction: The Central Bank will offer Rs. 140.00 Bn today (Rs. 65.00 Bn for 91-day, Rs. 40.00 Bn for 182-day, and Rs. 35.00 Bn for 364-day tenors). This is lower than the estimated maturing volume of Rs. 162.00 Bn. In the previous auction, yields had declined across all tenors for the first time in 10 weeks, with the 91-day average at 8.13%. • Money Market Liquidity: Net liquidity surplus stood strong at Rs. 181.68 Bn. Overnight call money and repo rates averaged 7.84% and 7.89% respectively, while the CBSL drained Rs. 75.00 Bn via an overnight repo auction at 7.74%. • Forex Market: The USD/LKR spot contracts traded in a range of Rs. 327.85 to Rs. 328.90. Total traded volume stood at US$ 76.25 Mn.
📈 CSE Edges Lower Despite Early Gains; Foreign Buying Turns Positive
The Colombo stock market closed marginally lower yesterday, reversing a sharp early gain of over 235 points due to late profit-taking driven by economic and global uncertainties. • Overall Market Figures: All Share Price Index (ASPI) fell by 0.07% (15.40 points) to close at 22,298.07. S&P SL20 decreased by 0.21% (31.21 points) to end at 6,148.77. Daily market turnover reached over Rs. 2.3 Bn, with more than 93.1 million shares traded. • Foreign & Investor Participation: Foreign investors emerged as net buyers, recording a net inflow of over Rs. 50 Mn. Participation from both high-net-worth (HNW) and retail investors remained subdued. • Sector & Stock Performance: The capital goods sector led daily market turnover with a 29% share. The banking and food, beverage & tobacco sectors collectively contributed 27% to turnover. Top negative contributors to the ASPI included JKH, RICH, CIC, SAMP, and NDB.
📈 Global Markets: Asian Shares Mixed, Oil Eases on Trump's Iran Comments
Global markets showed mixed reactions on Tuesday as investors weighed U.S. President Donald Trump's decision to pause a planned attack on Iran to allow for nuclear negotiations, temporarily easing energy supply fears. • Energy & Commodity Impact: Brent crude futures fell over 2% to US$ 109.41 a barrel, while U.S. crude dropped 1.3% to US$ 107.25 a barrel. Despite the dip, both benchmarks remain more than 50% above pre-war levels. Spot gold eased marginally to US$ 4,562.50 an ounce. • Equities & Regional Breakdown: • MSCI's broadest index of Asia-Pacific shares (ex-Japan) fell 0.22%. • South Korea's Kospi dropped 2%, while Japan's Nikkei bucked the trend, rising 1%. • U.S. futures edged lower (Nasdaq down 0.07%, S&P 500 down 0.03%) ahead of highly anticipated Nvidia earnings. European futures (EUROSTOXX 50) rose 0.4%. • Bonds & Forex: The drop in oil prices halted a steep global bond selloff. Benchmark 10-year U.S. Treasury yields eased from a one-year high to 4.5974%, while the two-year yield dipped to 4.0564%. The US$ strengthened on safe-haven demand, rising 0.1% against the Japanese Yen to 159 yen, while the Euro and Sterling both shed 0.1%. _Note: Market sentiment remains cautious as G7 finance ministers flag concerns over public debt, volatility, and potential inflation-driven central bank rate hikes._