The Treasury will offer US$100 million of Domestic Dollar Bonds from 19 October, with scope to raise up to US$300 million, and has cut the minimum investment from US$1 million to US$10,000 — opening a government dollar instrument to individual and diaspora investors for the first time since the 2022 default.
Treasury Secretary Dr. Harshana Suriyapperuma announced the terms at the Sri Lanka Economic and Investment Summit on Tuesday, the Daily FT reported. EconomyNext reported the auction from the debt office’s own data the same afternoon.
Two figures, one offer
The two filings lead on different numbers — US$300 million and US$100 million — and the Daily FT’s account resolves it rather than contradicting it. The US$100 million offer “could be topped up by another US$200 million in two tranches.” US$100 million is the offer; US$300 million is the ceiling if both top-ups are taken.
EconomyNext’s figure is the one in the debt office document, and there is a reason the base is set exactly there. When the Cabinet approved selling foreign-currency bonds into the local market in October last year, Minister Nalinda Jayatissa said a survey had found appetite for around US$100 million of paper from under one year to three years. The opening tranche is sized to the demand the government measured; the US$200 million above it is untested.
The terms
| Maturities | 1, 2 and 3 years |
| Interest | Fixed, set by competitive bidding for each maturity |
| Subscription | 9.00 a.m. 19 October to noon 23 October 2026 |
| Settlement | 30 October 2026 |
| Minimum | US$10,000, then multiples of US$10,000 |
| Coupon dates | 30 April and 30 October, actual days over a 360-day year |
| Currency | Principal and interest in dollars, fully repatriable |
The issue is run by the Public Debt Management Office of the Finance, Planning and Economic Development Ministry. It is open to foreign citizens and Sri Lankans abroad investing through Inward Investment Accounts, to holders of personal and business foreign-currency and offshore banking accounts, to companies, partnerships and funds established overseas, and to licensed commercial banks appointed as authorised dealers.
The ticket size is the actual change
This is the second dollar-denominated domestic issue since the debt crisis, and the comparison with the first is where the policy shift sits. In 2025 the government raised about US$50 million through a Domestic Dollar Bond with a US$1 million ticket, which in practice limited it to commercial banks.
“Last time, the ticket size was US$1 million because it was open only to commercial banks. This time, it is open to the diaspora, individuals and businesses, Government or otherwise, who have access to foreign earnings and savings,” Suriyapperuma said.
A hundredfold cut in the minimum changes who the instrument is for. Suriyapperuma called the issue a test of the local market and a signal of the direction the government is taking on financial stability alongside debt sustainability. “The targets are very clearly laid out, and we have reached the required levels as of now.”
A second enabling step is already on the record: in February this year the Cabinet approved submitting rules to Parliament to let exporters invest in domestic dollar bonds.
The three-year tranche sits outside the plan given to Parliament
One term is worth checking against what the government has already told Parliament. In August, Deputy Minister of Finance and Planning Dr. Anil Jayantha Fernando told the House that debt repayment plans had been drawn up through 2030 and that no Domestic Dollar Bonds will be outstanding after 2028 — after which, he said, “we will only have bilateral, multilateral and International Sovereign Bond obligations.”
A three-year bond settling on 30 October 2026 matures on or about 30 October 2029. If that tranche is subscribed, Domestic Dollar Bonds will be outstanding in 2029.
The statement and the offer are not necessarily inconsistent: August’s remarks are most naturally read as describing the stock outstanding at the time, not ruling out new issuance. But the plan as reported to Parliament does not accommodate the instrument now being sold, and neither filing notes the point. Whether the three-year maturity is taken up is a matter for the bidding.
Debt strategy, as the Treasury Secretary describes it
Suriyapperuma said the strategy rests on two approaches: cutting interest costs by retiring debt as early as possible, and replacing short-term with long-term borrowing to give “predictability, consistency and stability.” The government is also reducing foreign-currency debt exposure in favour of rupee debt, which he said has worked well so far — a direction a dollar-denominated instrument runs against at the margin, though the sums here are small.
On external options he left the field open: “We are looking at all options. Not a single option is set aside.” The Treasury would take whichever route best serves the country, whether the local market or a more open one.
The scale is worth keeping in proportion. Reserves slipped 1.1% to US$6.85 billion in September, against scheduled outflows of US$5.91 billion over the following twelve months. Even the full US$300 million is about 4.4% of the reserve stock, and a successful US$100 million tranche about 1.5%.
Not reported
No indicative or target yield for any of the three maturities, and no split of the US$300 million ceiling across them. Neither filing says what triggers the two top-up tranches or who decides, what the 2025 issue paid, or how much of this issue the government expects from the diaspora as against domestic foreign-currency account holders. Neither reports whether the exporter rules approved for Parliament in February have been enacted. No arranger or authorised-dealer list is published, and there is no comment from the Central Bank on the implications for reserves.
