Sri Lankan rupee depreciates further against US dollar

The Sri Lankan rupee has continued its gradual depreciation against the US dollar. Recent market data shows the exchange rate moving toward the 331-336 range, with commercial banks reporting varying buying and selling rates. For instance, Seylan Bank maintained a selling rate of Rs. 336.75, while NDB Bank and People’s Bank saw slight increases in their rates.

This currency movement coincides with broader shifts in the Sri Lankan financial market. Government securities yields have risen, with secondary bond yields increasing by 50 to 70 basis points week-on-week. Additionally, banking system liquidity has contracted, falling to LKR 317.84 billion from a previous LKR 336.44 billion.

Foreign investor behavior remains split between asset classes. While there has been a net outflow from the Colombo Stock Exchange, with foreign investors selling LKR 213.1 million in shares, holdings in local government securities rose by 1.31% week-on-week to LKR 213.4 billion.