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The Central Bank of Sri Lanka (CBSL) introduces a maximum Loan to Value (LTV) ratio for gold backed lending and tightens LTV ratios on credit granted for motor vehicles

The Governing Board of the CBSL decided to introduce a maximum LTV ratio for credit facilities secured by gold and tighten the maximum LTV ratios applicable to credit facilities granted in respect of motor vehicles with effect from 25 May 2026. These steps are taken by the CBSL in line with its macroprudential authority, in order to promote prudent lending practices, safeguard the resilience of financial institutions, and mitigate the potential build-up of systemic vulnerabilities.

SL Purchasing Managers’ Index (PMI) – April 2026

Purchasing Managers’ Indices indicate a contraction in Manufacturing activities and Services activities in April 2026.

Following the seasonal pattern, Sri Lanka Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) contracted in April 2026, recording an index value of 42.6. New Orders, Production, Employment, and Stock of Purchases sub-indices declined during the month compared to the seasonal peak in March, resulting in an overall contraction in the index.

Central Bank of Sri Lanka launches the Complaint Management System for Financial Consumers

The Central Bank of Sri Lanka (CBSL) announces the launch of an online Complaint Management System (CMS) marking a significant step to facilitate the submission of complaints and grievances by financial consumers relating to Financial Service Providers (FSPs) regulated by CBSL.

CCPI based headline inflation accelerated in April 2026 amidst tensions in the Middle East

The Colombo Consumer Price Index (CCPI, 2021=100) based headline inflation (year-on-year, Y-o-Y) accelerated in April 2026 reflecting the spillovers from the ongoing war in the Middle East, particularly the significant upward adjustments in domestic energy prices. Accordingly, headline inflation (Y-o-Y) was recorded at 5.4% in April 2026 compared to 2.2% in March 2026.

External Sector Performance - March 2026

The external current account recorded a marginal surplus in March 2026, mainly supported by higher workers’ remittances and a lower primary income deficit, despite a widening of the trade deficit and a moderation in the services surplus compared to a year earlier. The cumulative current account surplus reached US$ 531 million during the first quarter of 2026.

Sri Lanka PMI - Construction expanded in March 2026

The Sri Lanka Purchasing Managers’ Index for Construction (PMI – Construction), as reflected by the Total Activity Index, recorded a value of 57.1 in March 2026, indicating continued expansion in construction activities, albeit at a slower pace than the previous month. Many respondents reported a challenging operating environment, mainly due to limited availability of fuel and raw materials, rising costs, and logistical bottlenecks stemming from the conflict in the Middle East.

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