Sri Lanka’s rupee closed at 319.75/320.00 to the US dollar in the spot next market on Thursday, after trading at 319.50/320, market participants said, as inflation data showed prices reaching the Central Bank’s mid-point target.
Central Bank intervention was around Rs. 319.50 to the US dollar, EconomyNext reported. Commercial banks were selling dollars for telegraphic transfers at Rs. 323.
Headline inflation reached 5.4 percent in April, close to the Central Bank’s 5 percent mid-point target after holding at 2.2 percent in March. The Department of Census and Statistics released the Colombo Consumer Price Index data the same day.
Earlier this week the Central Bank began repo operations to mop up some of the excess liquidity built up over the past 18 months from buy-sell swaps and dollar purchases. EconomyNext reported the agency had allowed excess liquidity of about Rs. 400 billion to remain in the system, almost twice the level seen before the 2022 economic crisis.
The rupee weakened from Rs. 297.50 levels to Rs. 310 over the course of 2025, EconomyNext said. In 2026 it has fallen further from Rs. 310 to Rs. 320 against the dollar, even as private credit growth slowed following Cyclone Ditwah.
The depreciation has amplified the cost of fuel imports at a time when Brent crude has been trading above USD 100 a barrel on the extended US naval blockade and Iran-related Middle East shipping disruption. CPC pump prices were raised roughly 35 percent earlier in April.
Analysts have noted that the rupee falls and forex shortages of 2015 and 2018, and the 2022 default, all unfolded with inflation below 5 percent — meaning the present combination of currency weakness, repo tightening and excess liquidity remains a watch-point even as the Central Bank reports its target met.
