Foreign investors sell Sri Lankan rupee bonds for fourth straight week, though year remains net positive

Foreign investors sold a net Rs.5.447 billion of Sri Lankan rupee bonds in the week ending 12 November, extending a run of net selling to four consecutive weeks. The amount was reported as equivalent to about US$16.5 million. The figures, drawn from Central Bank data, concern foreign holdings of local-currency government securities, not a withdrawal of the same amount from every part of the economy.

Over the latest six weeks, cumulative net outflows reached Rs.33.9 billion. That six-week total and the four-week consecutive selling streak describe different periods. The data also showed foreign net selling in six of the latest twenty-one weeks, rather than an uninterrupted departure throughout that whole interval.

Recent outflows do not erase the year's earlier inflows

Despite the recent reversal, Sri Lanka still recorded around Rs.38.2 billion of net foreign inflows into rupee bonds from the start of 2026 through 12 November. The corresponding net inflow for the whole of 2025 was Rs.71.5 billion. The current year-to-date number is not a full-year result and should not be compared without that qualification.

The rupee had depreciated 6.8 percent against the US dollar by 13 November. The Central Bank had cited higher oil and vehicle imports when explaining pressure on the currency earlier in the year. In May it raised its key policy rate by 100 basis points, equivalent to one percentage point, to restrain inflationary pressure.

Foreign investors in local-currency bonds face exchange-rate changes as well as bond-price and interest-rate movements. Government securities should therefore not be described as universally risk-free. The weekly flow data show the direction and scale of recorded foreign buying and selling; they do not, on their own, establish why each investor acted or predict next week's flows.