The National Chamber of Exporters (NCE) has warned that continued depreciation of the Sri Lankan rupee will have a significant long-term negative impact on the country’s export sector, even as some sectors gain short-term forex windfalls.
The rupee has moved from Rs. 315 a month ago to Rs. 333 against the US dollar, with the spot indicative rate hovering between Rs. 321 and Rs. 325, the NCE said in a statement carried in Daily FT. Buying rates at NDB, People’s Bank, Commercial Bank and Sampath Bank have reached Rs. 325-327 and selling rates Rs. 334 — the highest level since December 2023. The currency has depreciated about 3.6% to 4.5% against the dollar from the end of last year.
The chamber said the most immediate consequence is that imports and foreign payments have become more expensive, with businesses that depend on imported raw materials feeling that pressure directly. Cost-push inflation is also rising, with Colombo Consumer Price Index headline inflation climbing to 5.4% in April 2026 from 2.2% in March — driven significantly by upward adjustments in domestic energy prices.
Central Bank data cited by the NCE showed expenditure on fuel imports rose 74.7% year-on-year to USD 630 million in March 2026, reflecting both higher fuel prices and volumes tied to the war in West Asia. Total intermediate goods imports for March hit USD 1.26 billion, the highest monthly level since December 2021. Fuel accounted for exactly half, with textiles ($236.1m), chemicals ($100.4m) and plastics ($48.3m) the next-largest categories.
While exporters and tourism operators benefit from converting foreign income into more rupees in the short term, “the larger issues outweigh these benefits,” the chamber said. Sri Lanka’s total merchandise exports reached USD 13.5 billion in 2025, with Q1 2026 exports at USD 3.4 billion — a 3.4% increase on Q1 2025 — led by apparel, tea and rubber products.
The NCE warning is the third distinct industry voice on the current rupee cycle. The Joint Apparel Association Forum chairman Felix Fernando earlier endorsed the weaker rupee as net-positive for exports, while CBSL Governor Nandalal Weerasinghe has framed the slide as temporary and globally driven. The NCE’s stance is distinct in flagging medium-term competitiveness erosion from imported-input cost inflation that affects exporters’ own production cost base.
Sri Lanka spent USD 11.8 billion on intermediate goods imports in 2025 — a baseline that, at March’s run-rate, points to a sharply higher full-year bill in 2026.
Source: Daily FT.
