Written by Jiffry• August 29, 2026• 12:01 am• Business • Views: 22

Rupee Down 5.7% in 2026 as Lending Rates Edge Higher

The Sri Lankan rupee has depreciated 5.7% against the US dollar so far in 2026, while lending rates also moved slightly higher during the latest week.

The Central Bank of Sri Lanka (CBSL) said the rupee’s year-to-date depreciation stood at 5.7% as of August 28.

The currency movement comes as businesses and consumers continue to operate in an environment where borrowing costs remain relatively high.

Lending Rates Move Higher

The Average Weighted Prime Lending Rate increased by nine basis points during the week to 10.95%.

The Average Weighted Call Money Rate also rose, reaching 8.84% from 8.81% a week earlier.

At the same time, liquidity in the domestic money market remained in surplus.

Total outstanding market liquidity rose to Rs. 318.13 billion as of August 28, up from Rs. 278.51 billion a week earlier.

That means the market held about Rs. 39.62 billion more liquidity than at the end of the previous week.

Stock Market and Foreign Holdings

The Colombo stock market also ended the week lower.

The All Share Price Index (ASPI) fell 0.47% to 21,315.91 points, while the S&P SL20 declined 0.38% to 6,005.34 points.

Foreign investors, however, increased their holdings of Treasury Bills and Treasury Bonds by about 3.98% during the week, measured in rupee terms.

Demand at government securities auctions also remained strong. Treasury Bill auctions were oversubscribed by about 2.9 times, while Treasury Bond auctions were oversubscribed by about 4.7 times.

Oil Prices Fall

Global oil prices moved lower during the week.

Brent crude fell by US$4.50 per barrel, while West Texas Intermediate (WTI) declined by US$3.59 compared with the previous week.

The decline came as concerns about possible supply disruptions eased following progress in discussions between Iran and Oman over traffic through the Strait of Hormuz.

The latest weekly figures therefore show a mixed picture, with the rupee under pressure and lending rates edging higher, while money-market liquidity and foreign holdings of government securities increased.