Foreign investors sold Rs. 1.38 billion ($4.6 million) worth of Sri Lankan government securities during the week ending May 15, reversing a two-week buying streak, Central Bank data revealed.
The outflow comes amid heightened global market uncertainty following former U.S. President Donald Trump’s tariff announcement, which triggered a slight depreciation in the Sri Lankan rupee and a shift by global investors toward safe-haven assets such as gold.
Despite the latest weekly sell-off, Sri Lanka has recorded a net inflow of Rs. 20.4 billion ($68 million) into government securities since December 26, 2024, driven in part by the country’s tight deflationary fiscal and monetary policies that have helped curb imports and attract capital, analysts said.
Total foreign holdings in treasury bills and bonds stood at Rs. 69.26 billion by late December.
In the 15-week period through December 26, 2024, foreign investors poured in Rs. 29.9 billion into Sri Lanka’s debt market.
The latest outflows, though modest, follow 10.1 billion rupees in net withdrawals in the two weeks immediately after Trump’s tariff remarks. However, these recent outflows remain small in contrast to the 48.2 billion rupees in foreign exits witnessed over the course of 2024, and the 78.1 billion rupees withdrawn in the first nine months of last year.
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