Colombo, Sri Lanka – 25 September 2026 – Sri Lanka’s economic landscape presented a mix of challenges and cautious stability this week, as the Central Bank of Sri Lanka (CBSL) released its latest Weekly Economic Indicators for 25 September 2026. The report highlights a notable acceleration in inflation for August 2026, alongside fluctuations in global oil prices and adjustments in local financial markets.
Real Sector: Inflationary Pressures and Agricultural Performance
Inflation emerged as a significant concern, with the National Consumer Price Index (NCPI, 2021=100) based headline inflation accelerating to 8.1 per cent in August 2026, up from 7.2 per cent in July 2026. This increase was driven by both food and non-food inflation, which recorded 6.6 per cent and 9.3 per cent, respectively. NCPI based core inflation also saw an uptick, rising to 6.3 per cent in August 2026 from 6.0 per cent in the preceding month, indicating broader inflationary trends.
In the agricultural sector, the period from January to July 2026 witnessed year-on-year declines in both tea and rubber production. However, there was a silver lining in July 2026, where the decline in tea production was marginal compared to earlier months, suggesting a potential stabilization. Rubber production, similarly, remained broadly stable during July 2026 compared to the previous year. Coconut production recorded a year-on-year decline during May to June 2026, partly attributed to a high base effect from the prior year.
Global crude oil prices experienced volatility during the week from 21 to 25 September 2026. Initially, prices eased amidst Saudi Arabia’s efforts to restore crude oil pipelines in the Red Sea region and renewed hopes for a diplomatic resolution to the US–Iran conflict during the UN General Assembly. However, prices reversed course later in the week due to renewed militant attacks against Saudi Arabia and heightened US–Iran tensions. Consequently, Brent crude prices increased by US dollars 1.74 per barrel, while WTI prices saw a notable decline of US dollars 8.19 per barrel, primarily due to an unexpected surge in US crude oil inventories.
Monetary Sector: Interest Rates Edge Up, Market Liquidity Grows
The monetary sector reflected a tightening stance, with the Weekly Average Weighted Prime Lending Rate (AWPR) for the week ending 25 September 2026 increasing by 18 basis points (bps) to 10.94 per cent compared to the previous week. Similarly, the Average Weighted Call Money Rate (AWCMR) rose to 8.96 per cent on 25 September 2026, up from 8.91 per cent at the end of last week.
Reserve money increased over the previous week, mainly driven by an increase in deposits held by commercial banks with the Central Bank. The total outstanding market liquidity continued to be in surplus, reaching Rs. 370.92 billion by 25 September 2026, an increase from Rs. 359.79 billion at the end of the previous week.
On the stock market, as of 26 September 2026, the All-Share Price Index (ASPI) decreased by 0.09 per cent to 21,037.35 points. In contrast, the S&P SL 20 Index showed a positive movement, increasing by 0.20 per cent to 5,940.72 points, compared to the index values of the previous week.
Fiscal Sector: Stable Yields and Foreign Investment Outflows
In the fiscal sector, Treasury Bill yields remained broadly stable in both primary and secondary markets during the reporting week. Treasury Bond yields also demonstrated broad stability in the secondary market. However, the rupee value of Treasury Bills and Treasury Bonds held by foreign investors decreased by approximately 4.5 per cent in the reporting week compared to the previous week, indicating a slight outflow of foreign capital from government securities.
Despite the foreign outflows, the auction for Treasury Bills experienced a healthy oversubscription rate of approximately 2.4 times, highlighting domestic demand for government debt instruments. The total volume of secondary market transactions in Treasury Bills and Treasury Bonds remained stable compared to the week before.
External Sector: Rupee Depreciation Continues
The external sector continued to face pressures, with the year-to-date depreciation of the Sri Lanka rupee against the US dollar recorded at 6.2 per cent as of 25 September 2026.
The CBSL’s weekly indicators provide critical insights into the evolving economic landscape, serving as a vital resource for policymakers, businesses, and investors navigating Sri Lanka’s economic recovery path.
Source: Central Bank of Sri Lanka – Weekly Economic Indicators, 25 September 2026
