Sri Lanka’s rupee closed at 310.00/10 against the US dollar in the spot market on Tuesday, marking a decline from the previous day’s rate of 309.75/85, according to market dealers. Meanwhile, bond yields exhibited an upward trend at the short end, while remaining stable across the rest of the yield curve.

The bond maturing on December 15, 2026, closed unchanged at 8.50/60 percent. The bond maturing on September 15, 2027, experienced a slight increase, closing at 9.00/05 percent, compared to 8.95/9.05 percent previously. The bond due on December 15, 2028, closed at 9.20/30 percent, while the bond maturing on December 15, 2029, saw a minor decrease, closing at 9.70/73 percent, down from 9.73/75 percent.

The bond maturing on July 1, 2030, also experienced a slight dip, closing at 9.77/80 percent from its previous rate of 9.77/81 percent. Additionally, the bond maturing on October 1, 2032, closed at 10.30/40 percent.

The weakening of the rupee, which has depreciated from 293.25/75 to the US dollar last year, occurs amidst record current account surpluses and improvements in the national budget. These developments challenge the usual explanations provided by macro-economists for depreciating currencies.

(Colombo/Jan6/2026)