Foreign investors continued to divest from Sri Lankan government securities for the second consecutive week ending January 21, according to data released by the Central Bank. This trend has seen a shift towards safer investments such as gold.
In the last 21 weeks, this marks the seventh week that foreign investors have sold rupee bonds. During the week in question, net sales amounted to 550 million rupees, equivalent to approximately US$1.79 million at an exchange rate of 1 USD to 308 rupees. This follows net sales of 948 million rupees in government securities in the previous week.
Despite these outflows, Sri Lanka recorded a total inflow of around 71.5 billion rupees, or approximately US$234.4 million, into rupee bonds in 2025. However, the nation experienced an outflow of 10.1 billion rupees (approximately US$32 million) in the two weeks following the tariff announcement by Donald Trump in early April of the previous year, contributing to a depreciation of the rupee.
Analysts suggest that Sri Lanka’s deflationary policies have facilitated these inflows by curbing imports. The Central Bank of Sri Lanka has maintained steady key policy rates since May of the previous year, having reduced them by 825 basis points over a span of 24 months. Despite the depreciation of the local currency, foreign investors have continued to purchase rupee bonds.
(Colombo/January 19/2026)
