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Monetary | Economy

Sri Lanka inflation rises to 5.5-pct in May 2026, after currency fall

Published Monday, 15th June 2026 3:22 PM ● By
MONETABRIEF – Sri Lanka's inflation rose to 5.5 percent in the 12-months to May 2026, with the rupee falling steeply as the island's confidence busting flexible exchange rate struck, following a period of rate cuts and money printed through buy-sell swaps.

The Colombo Consumer Price Index grew 0.8 percent to 203.4, after rising 3.0 percent in April 2026. The index is now higher than the crises period of 2022.

The food subindex rose 0.8 percent after rising 1.7 percent over the previous month.

Sri Lanka's exchange rate was sliding over 2025, amid current account surpluses, due to denied convertibility to private borrowers.

The rupee fell from 292 to 309 in February 2026, when Cyclone Ditwah led credit collapse allowed the central bank to buy more than 600 million dollars from market. This money was left unsterilized and exchange rate slumped as the central bank suddenly stopped honoring its bank notes, under a 'flexible exchange rate'.