FINANCIAL CHRONICLE – The Governor of Sri Lanka’s Central Bank attributed the depreciation of the national currency to a rise in imports, particularly of petroleum products, alongside a downturn in tourism revenue.
These remarks were made during a session with the Parliament Committee on Public Finance (COPF) on Thursday, May 14, where senior officials from the Central Bank addressed recent economic developments following rising tensions in the Middle East.
The Governor highlighted that the oil import expenses incurred by the state-owned Ceylon Petroleum Corporation have surged significantly in the first four months of this year, reaching two-thirds of the total expenditure for the entire year of 2025.
He noted that while tourism is experiencing a slowdown, remittance inflows remain relatively stable. However, despite the substantial increase in imports, export performance has not shown corresponding growth, which he explained when questioned about the depreciation of the rupee.
This situation has intensified pressure on the foreign exchange market and contributed to currency depreciation, he stated.
Additionally, some analysts have pointed to the Central Bank’s inability to absorb excess liquidity from the rupee in the market as a contributing factor to the currency’s decline.
As of May 15, the rupee has depreciated by 4.5 percent this year. (Colombo/May 18/2026)
