Foreign investors sold Sri Lanka rupee government bonds for a second consecutive week, offloading a net Rs 8,605 million (US$26.1 million) as depreciation pressure on the rupee persisted, EconomyNext reported from Central Bank data.
That is roughly three times the Rs 2,818 million sold in the preceding week, which this desk reported on Thursday as the first outflow in four weeks. The selling has gone from an interruption to a trend.
The numbers
- Net selling this week: Rs 8,605 million (US$26.1 million)
- Net outflow over the last four weeks: Rs 22.4 billion
- Net inflow so far this year: about Rs 49.7 billion
- Net inflow in 2025: Rs 71.5 billion
- Net selling in four of the last 20 weeks
The year-to-date figure reconciles cleanly against this desk’s own record. EconomyNext put the 2026 inflow at about Rs 58.3 billion a week ago; Rs 58.3 billion less this week’s Rs 8.6 billion outflow gives Rs 49.7 billion, which is exactly the figure now reported. The week’s selling is therefore consistent with the running total rather than an isolated print.
Foreign holdings remain substantially up on where they started the year. But the 2026 inflow is now tracking at about 70 per cent of last year’s full-year figure, with two months left to run — and the direction of travel has turned.
Why
Analysts quoted by EconomyNext attributed the selling to downward pressure on the local currency. The rupee has fallen 6.8 per cent through 30 October, up from the 6.7 per cent recorded through 27 October.
The currency had been steady for more than three years before a sharp depreciation in May, which the Central Bank attributes to higher oil and vehicle imports amid the continuing Middle East conflict. The Central Bank raised its key policy rate by 100 basis points in May; before that, rates had been held since May 2025 following 825 basis points of cuts over 24 months from June 2023 — the easing cycle during which foreign investors were consistent buyers.
Inflation has picked up over the last seven months after a near-50 per cent rise in fuel prices, with the government raising prices again in the last week of September having cut them in June and August.
A note on the reporting period
EconomyNext’s filing is internally inconsistent about which week it covers, as it was a week ago. Its opening paragraph gives the week ended 30 October; a later paragraph gives the week ended 29 October. Neither date changes the figures, and this desk cannot resolve the discrepancy from the filing.
Not reported
The filing does not break the selling down by maturity, say whether it was concentrated in particular bond series, or identify the categories of investor involved. It gives no figure for total foreign holdings of rupee bonds as a share of outstanding stock.
Single source. This weekly Central Bank series is tracked regularly by EconomyNext; a search of other verified newsrooms found no independent report of this week’s figures at the time of writing.