31 March 2026
1. Rupee Depreciation Amid Middle East Conflict
The Sri Lankan rupee has depreciated by approximately 1.3% in 2026, with pressures intensifying following the Middle East conflict. By 25 March 2026, the exchange rate reached around Rs. 314.2 per US dollar. (english.newsfirst.lk)
2. Central Bank's Foreign Exchange Purchases
The Central Bank of Sri Lanka (CBSL) has been actively purchasing foreign exchange, with net purchases totaling $700 million in the first two months of 2026. This strategy aims to bolster the country's foreign reserves. (ft.lk)
3. IMF Emergency Financial Support
In December 2025, the International Monetary Fund (IMF) approved emergency financing of approximately $206 million for Sri Lanka under the Rapid Financing Instrument. This support is intended to address urgent balance-of-payments and fiscal pressures resulting from Cyclone Ditwah. (imf.org)
4. Policy Rate Unchanged Amid Economic Growth
The CBSL maintained the Overnight Policy Rate at 7.75% in January 2026, citing firm economic growth and inflation moving towards the 5% target. Inflation remained at 2.1% in December 2025, with expectations of gradual increase by late 2026. (fibre2fashion.com)
These developments highlight the dynamic factors influencing the Sri Lankan rupee's performance in 2026.
EUR Weekly Market Overview
Updated 28 Jul 2026 • 23:46 GMT
The euro remains under pressure as it holds near its recent lows against the US dollar. Market participants are cautious due to geopolitical tensions in the Middle East, alongside expectations of at least one more rate hike by the US Federal Reserve before the year ends. These developments have heightened inflation concerns, further complicating the euro's recovery. Despite recent economic indicators, the Eurozone faces challenges that could keep the euro subdued in the near term.
- Key watchpoints:
- Potential Federal Reserve rate hike and its impact on the EUR/USD.
- Geopolitical tensions in the Middle East affecting market sentiment.
- Eurozone economic indicators and ECB decisions and their influence on the euro's trajectory.