KNOWLEDGE HUB

Tuesday, August 18 2026

Tuesday, August 18 2026

Sri Lanka Rupee Closes Stronger at 332.00/20 to US Dollar, Bond Yields Mixed

Published Monday, 17th August 2026 5:31 PM

MONETABRIEF - Sri Lanka closed at 332.00/20 to the US dollar in the spot market Monday stronger from 332.80/90 rupees while some bonds yields picked up from lows.

Sri Lanka's has attracted foreign investor interest in rupee bonds, but the central bank has resisted appreciation from what is positive external shock, after busting the rupee from 310 to 335 claiming there was an 'external' shock, amplifying the effects of the Middle East war.

The rupee was busted by dishonoring notes created by purchasing dollars and through fx swaps.

Excess liquidity is again building up, which the central bank can again dishonor under its 'exchange rate as the first line of defence' doctrine.

After the end of a civil war in particular, the operating framework has been used to undermine the credibility of democratically elected governments, analysts have pointed out.

Ater the latest currency collapse and the central bank reaching its controversial target to push up the cost of living, public discontent in the government has grown repeating a trend seen in the past.

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