COLOMBO, Sri Lanka – 28 August 2026 – Sri Lanka’s economic landscape presented a mix of shifts in the week ending 28 August 2026, with key monetary indicators signalling an upward trend while global crude oil prices eased. The Central Bank of Sri Lanka (CBSL) released its latest “Weekly Economic Indicators,” offering a crucial snapshot of the nation’s financial and real sectors.
Real Sector: Oil Price Volatility and Easing Concerns
The real sector witnessed notable movements in crude oil prices this week. Initially, crude oil prices held steady at elevated levels as investors weighed the implications of expanded US sanctions on Iran against limited prospects for renewed US–Iran talks. However, by the end of the reporting period, prices saw a decline following progress in discussions between Iran and Oman concerning traffic management through the Strait of Hormuz. This development significantly eased concerns over potential supply disruptions.
Overall, Brent crude oil prices recorded a decline of US dollars 4.50 per barrel, while West Texas Intermediate (WTI) crude oil prices dropped by US dollars 3.59 per barrel compared to the previous week, providing some relief on the import front for energy-dependent economies like Sri Lanka.
Monetary Sector: Rates Climb, Stocks Retreat
The monetary sector demonstrated an upward movement in key interest rates. The Weekly Average Weighted Prime Lending Rate (AWPR) for the week ending 28 August 2026 increased by 9 basis points (bps) to 10.95 per cent. Similarly, the Average Weighted Call Money Rate (AWCMR) rose to 8.84 per cent on 28 August 2026, up from 8.81 per cent at the end of the prior week, indicating tightening liquidity conditions.
Reserve money also saw an increase compared to the previous week, primarily driven by a rise in currency in circulation. Total outstanding market liquidity remained in surplus, expanding to Rs. 318.13 billion by 28 August 2026, compared to a surplus of Rs. 278.51 billion recorded last week.
Sri Lanka’s equity market experienced a downturn. The All-Share Price Index (ASPI) decreased by 0.47 per cent, closing at 21,315.91 points. The S&P SL 20 Index also saw a decline of 0.38 per cent, reaching 6,005.34 points, reflecting a cautious sentiment among investors.
Fiscal Sector: Stable Yields and Robust Auction Demand
In the fiscal sector, Treasury Bill yields registered a marginal decrease in both the primary and secondary markets. Treasury Bond yields, however, largely remained stable in the secondary market, with the exception of a marginal decrease in 15 and 20-year bond yields.
Foreign investor confidence in government securities showed positive momentum, with the rupee value of Treasury Bills and Treasury Bonds held by foreign investors increasing by approximately 3.98 per cent during the reporting week. Primary market auctions for government securities demonstrated strong demand, with Treasury Bills experiencing an oversubscription rate of approximately 2.9 times and Treasury Bonds achieving an oversubscription rate of about 4.7 times. Despite this strong primary market performance, the total volume of secondary market transactions in Treasury Bills and Treasury Bonds decreased by approximately 34.2 per cent compared to the preceding week.
External Sector: Rupee Depreciation Continues
The external sector highlighted ongoing pressure on the local currency. As of 28 August 2026, the year-to-date depreciation of the Sri Lankan Rupee against the US dollar stood at 5.7 per cent, a key indicator for import costs and foreign exchange reserves.
The latest Weekly Economic Indicators from the CBSL underscore a period of mixed economic signals for Sri Lanka, characterized by rising domestic interest rates and a slight retreat in the stock market, juxtaposed with declining global crude oil prices and continued rupee depreciation. These dynamics will remain critical for policymakers and businesses in the coming weeks as the nation navigates its path towards sustained economic stability.
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