Foreign investors buy Sri Lanka rupee bonds for second week
ECONOMYNEXT – Foreign investors bought Sri Lanka rupee bonds for a second straight week in the week ended on October 9, Central Bank data showed, amid a stable rupee.
With the latest inflows, the island nation has witnessed net foreign buying in 15 of the last 17 weeks.
Offshore investors bought a net Rs. Rs. Rs. 3,242 million (US$9.8 million) worth of Sri Lanka rupee bonds. The net buying extended the net foreign inflows into the rupee bonds to Rs. 5.1 billion in the last two weeks following a Rs. 16.5 billion outflow in the previous two weeks.
The inflows helped boost foreign holdings in government securities to 202 billion rupees.
Analysts said a less volatile local currency helped foreign buying last week.
The rupee had been steady for more than three years before the sharp depreciation in May with the Central Bank citing higher oil and vehicle imports amid a lingering conflict in the Middle East.
The rupee has fallen 6.3 percent through October 9 this year.Globally, investors are cautious about economic growth due to the impact of the latest Middle East escalation.
The island nation has enjoyed a total inflow of around 60.7 billion rupees into local currency bonds so far this year, following a net inflow of 71.5 billion rupees last year.
The island nation has seen an uptick in inflation in the last six months following a nearly 50 percent hike in fuel prices.
The government raised fuel prices in the last week of September after reducing it in June and August.
The Central Bank raised its key monetary policy rate by 100 basis points in May to curb inflationary pressure stemming from higher demand.
Before the May rate hike, the Central Bank kept its key policy rates steady since May 2025 after reducing them by 825 basis points over 24 months since June 2023 and foreign investors have been buying rupee bonds despite slight depreciation in the local currency (Colombo/October 11/2026)