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Rupee Depreciation Trend (Jan-May 2026)
Visualizing the percentage change in the value of the Sri Lankan Rupee against the USD over the first four months of 2026.
Primary Sources
Sri Lankan Rupee weakens further as US Dollar hits highest ... - Adaderana
The Sri Lankan Rupee came under further pressure today as the selling rate of the US Dollar rose to Rs. 329.92, marking the highest recorded rate since December 27, 2023. According to exchange rate data released by the Central Bank of Sri Lanka (CBSL), the Rupee has depreciated by 3.6% against the US Dollar during the period from January 1 to May 8, 2026. The US Dollar had remained fixed at Rs. 202.99 until March 7, 2022. However, following the decision to float the rupee on March 8, 2022, the exchange rate rose sharply, eventually reaching Rs. 377.49 by May 12, 2022. Subsequent policy measures introduced by the Central Bank helped stabilize the currency, with the dollar rate easing to Rs. 328.77 by the end of 2023. The lowest selling rate recorded thereafter was Rs. 294.49 on December 13, 2024. Despite that recovery, the rupee has once again weakened in recent months amid growing global economic uncertainty and increased demand for US dollars. Commenting on the situation, the Governor of the Central Bank, Dr. Nandalal Weerasinghe said exchange rate adjustments under Sri Lanka’s monetary policy framework were a normal occurrence. He stated that the current depreciation was largely driven by external factors, including the strengthening of the US dollar globally and the weakening of several regional currencies. The Governor pointed out that currencies in countries such as India, the Philippines, and Thailand had also come under pressure despite interventions by their respective central banks. Economic analysts at the Advocata Institute said the ongoing conflict in the Middle East had contributed to rising demand for US dollars, placing additional strain on the rupee. The institute further noted that instability in global crude oil markets and rising shipping costs had intensified the pressure on the exchange rate. According to analysts, continued depreciation of the rupee is likely to increase import costs while potentially boosting export earnings. However, they warned that a weaker rupee could adversely affect Sri Lanka’s foreign debt repayment burden.
Depreciating rupee: Macroeconomic ramifications for Sri Lanka
Sri Lanka is once again confronting mounting economic uncertainty as the Sri Lankan Rupee continues to weaken against the United States Dollar, renewing concerns over inflation, debt sustainability, and the rising cost of living. Following a period of relative exchange rate stability after the 2022 economic crisis, the rupee has recently slipped beyond the Rs. 325 mark against the dollar, reigniting debate over the resilience of the country’s fragile recovery.Economists warn that continued depreciation could trigger a cascading impact on inflation, domestic production costs, export competitiveness, and investor confidence. However, Government officials maintain that the present volatility remains manageable and reflects policy-driven reserve accumulation and external market conditions rather than a systemic domestic breakdown.Treasury perspective on debt and inflationTreasury Deputy Secretary Ananda Kithsiri Seneviratne, outlining the Government’s position on the currency movement, argued that the increase in debt measured in rupee terms should not be interpreted as an immediate fiscal threat.“While the debt stock is increasing in rupee terms, our current foreign debt stands at approximately $ 38 billion. Therefore, a Rs. 1 depreciation increases the debt stock by roughly Rs. 40 billion. “However, when measured against our Rs. 32 trillion Gross Domestic Product (GDP), this increase is relatively insignificant. It does not create a major immediate impact on debt servicing and repayment. The primary long-term consequence of currency depreciation is the pressure it places on the cost of living rather than the national debt itself,” Seneviratne stated.Responding to speculation that the Government had resorted to monetary expansion to finance expenditure, he firmly denied allegations of excessive money printing.“Under the Central Bank of Sri Lanka (CBSL) Act, printing money is strictly prohibited. The current inflationary pressure is driven primarily by exchange rate movements. The depreciation is largely the result of the Central Bank purchasing dollars from the market to strengthen national reserves. “In addition, the import ceiling for the Ceylon Petroleum Corporation (CPC) was recently increased from $ 100 million to over $ 400 million. That sharp increase in dollar demand by a single State institution has significantly influenced the exchange rate,” he explained.Funding relief without expanding the deficitAmid growing public concern over living costs, the ...
Sri Lanka rupee depreciation driven by global trends, CBSL governor ...
The recent depreciation of the Sri Lanka rupee is a reflection of shifting global market conditions rather than internal economic mismanagement, central bank governor Nandalal Weerasinghe insisted, but admitted intervening to prevent excessive swings.
CBSL Governor Attributes Sri Lanka's Currency Decline to Worldwide ...
FINANCIAL CHRONICLE - Central Bank Governor Nandalal Weerasinghe emphasized that the recent decline of the Sri Lankan rupee is primarily influenced by external market dynamics, rather than shortcomings in domestic economic management. He acknowledged, however, that the central bank has been actively involved in mitigating extreme fluctuations in the currency's value. During a public ...
