Sri Lanka Rupee depreciates by 1.6% against US dollar in 2026

The Sri Lankan rupee fell by 1.6% against the US dollar in 2026, according to the Central Bank of Sri Lanka (CBSL). As of the end of trading yesterday (31), the buying rate for the US dollar was Rs. 311.76, while the selling rate was Rs. 319.31. The CBSL explained that the rupee's drop is due to pressures from the external sector, which surfaced after the Middle East conflict began in late February 2026. In February 2026, the external current account showed a surplus, continuing a trend that started in November 2025. During January and February 2026, the cumulative surplus reached US$ 487 million, as reported by the CBSL. However, the merchandise trade deficit increased year-on-year in February 2026. For January and February 2026, the trade deficit grew to US$ 1.4 billion, up from US$ 1.1 billion during the same months in 2025. Vehicle imports, which include personal and commercial vehicles, totaled US$ 194 million in February 2026, bringing the total for January and February 2026 to US$ 418 million. Additionally, the gross official reserves (GOR), including the swap facility with the People’s Bank of China (PBOC), rose to US$ 7.3 billion by the end of February 2026. This increase was mainly due to higher foreign exchange purchases by the Central Bank, despite ongoing payments for external debt, the CBSL highlighted.