📉 Sri Lanka Rupee Bonds See Net Outflows After 3-Week Buying Streak

Foreign investors turned net sellers of Sri Lanka rupee bonds for the first time in four weeks in the week ended October 22, driven by downward pressure on the local currency. • Overall Bond Flows: - Weekly Net Outflow: Rs. 2.82 Bn (US$ 8.5 Mn) sold by offshore investors. - Recent Trend: Net foreign outflows reach Rs. 13.8 Bn over the last six weeks, reversing Rs. 5.5 Bn in net buying over the preceding three weeks. - Year-to-Date: Net inflows stand at ~Rs. 58.3 Bn so far this year (vs. Rs. 71.5 Bn total net inflows in the previous year). • Currency & Macro Context: - Rupee Performance: The Sri Lankan rupee has depreciated 6.7% year-to-date (through October 27) due to higher oil & vehicle imports and Middle East geopolitical tensions. - Monetary Action: The rupee has stabilized following the Central Bank's 100 bps policy rate hike in May to control inflation, which surged after a ~50% fuel price hike earlier in the year.