Central Bank Governor Dr. Nandalal Weerasinghe said on Monday that the Sri Lankan rupee’s 4.8 percent depreciation so far in 2026 is being driven primarily by the Middle East crisis and rising global oil prices, not by domestic economic stress, and that the country’s 5 percent growth target for the year is now uncertain because of the same external shock.
Speaking at a media briefing in Colombo, the Governor placed Sri Lanka’s currency move against regional peers: the Indian rupee has weakened 6.4 percent year-to-date, the Nepalese rupee 6.2 percent, and the Indonesian rupiah 5.2 percent. “This is not a situation unique to Sri Lanka,” he said, framing the slide as a global shock affecting oil-importing economies. Rising foreign exchange requirements for oil imports were placing additional pressure on the rupee, he added.
He contrasted the present pressure with the 2022 collapse, when the rupee was driven by domestic insolvency, balance-of-payments stress and reserve depletion. Currency moves alone, he cautioned, are a misleading gauge of economic strength.
On growth, Dr. Weerasinghe said projections before the conflict pointed to a 5 percent expansion in 2026, but conditions since April have made an accurate forecast difficult. If the global picture stabilises within three months, growth could still finish “close to 5 percent, though slightly lower.” A six-to-nine-month continuation of the shock, he warned, would have a more severe effect on output, with rising oil prices and inflation already weighing on the second quarter.
The briefing comes the same day Colombo stocks fell 1.59 percent to 22,542 with no spot quote on the rupee, the Treasury extended the Rs. 57 billion fuel subsidy, and the CBSL formally acknowledged the first current account deficit since the 2022 restructuring.
Sources: Ada Derana — rupee briefing, Ada Derana — growth forecast.
