FINANCIAL CHRONICLE – Foreign investors sold US$14.6 million worth of Sri Lanka government securities in the week ended March 12, Central Bank data showed, amid renewed depreciation pressure on the local currency.
The selling caused foreign holdings in local rupee bonds to fall from a nearly 30-month high last week. Foreigners sold a net 4,495 million rupees (US$14.6 million at 1$=308 rupees) in the week. It was the 9th week foreigners have sold rupee bonds in the last 27. However, they bought a net 17,290 million rupees (US$56.1 million) in the first 10 weeks of this year, data showed.
Globally, investors are cautious about economic growth due to the impact of the latest Middle East war and concerns over a Fed rate cut. When the Fed cuts interest rates, it triggers a chain reaction in global finance that effectively pushes capital out of the U.S. and pulls it toward riskier or alternative assets like emerging markets and metals, which could benefit countries like Sri Lanka.
The island nation enjoyed a total inflow of around 71.5 billion rupees (around US$234.4 million) into rupee bonds in 2025. Sri Lanka suffered an outflow of 10.1 billion rupees ($32 million) in the two weeks following Donald Trump’s tariff declaration in the first week of April last year and the rupee has fallen since then.
Analysts have said Sri Lanka’s deflationary policies have helped inflows amid curtailed imports. Sri Lanka’s central bank has kept its key policy rates steady since May last year after reducing them by 825 basis points over 24 months and foreign investors have been buying rupee bonds despite depreciation in the local currency.
(Colombo/March 16/2026)
