Category: Daily Financial Times

The Sri Lanka Ports Authority (SLPA) is set to remit Rs. 5 billion to the Consolidated Fund this year, marking a significant increase in its contribution following a sharp rise in profitability under the new administration.

According to a statement issued by the Ports and Civil Aviation Ministry, the State-owned entity has generated a net profit after tax of Rs. 39 billion as of 31 October 2025, reflecting an improvement of nearly Rs. 12 billion compared to the previous year.

The authority noted that this performance represents the strongest financial turnaround in its recent history.

It said for decades up to 2024, SLPA’s cumulative contribution to the Consolidated Fund amounted to just Rs. 10.3 billion. In contrast, the Authority will transfer Rs. 5 billion in 2025 alone, signalling a dramatic shift in its financial role.

The first tranche of Rs. 2 billion was remitted in September 2025, while the remaining Rs. 3 billion is scheduled to be transferred in December.

It attributed the improved profitability to strengthened operational efficiencies, better revenue management, and reforms initiated by the Government. The enhanced contributions would support fiscal consolidation efforts and reinforce the Ports Authority’s position as a key revenue-generating State enterprise.

Volumes at the main port of Colombo has seen moderate improvement this year.

Container volumes at the Port of Colombo rose 6.7% year-on-year to nearly 6.2 million TEUs in the first nine months of 2025, driven by growth in both transhipment and domestic handling, Central Bank data showed. September throughput increased 14.4% to 742,116 TEUs and was broadly unchanged month-on-month. Transhipment volumes were up 4.8% to 4.94 million TEUs in the nine-month period, while domestic handling rose 13.6% to 971,875 TEUs. Vessel traffic across all ports increased 12.6% to 3,792 ships.

The Government has announced several capacity-expansion and efficiency initiatives in the 2026 Budget, including Phase II of the Western Container Terminal, feasibility work on Port Logistics Centres and preparatory work for the Colombo North Port Development Project, alongside expanded digitalisation and a new Customs verification centre.

However, exporters have warned that recurring vessel omissions at Colombo are disrupting production schedules, with manufacturers reporting shortages of raw materials, delays and higher costs. The Free Trade Zone Manufacturers’ Association has called for urgent operational improvements and faster commissioning of new terminals to stabilise port performance.

Taj Samudra unveiled Navratna in its new avatar last week, following a comprehensive and elegant renovation. The refreshed design blends contemporary sophistication with timeless artistic elements, creating a warm and vibrant atmosphere that elevates the dining experience.

The new menu pays homage to India’s rich culinary heritage while introducing refined interpretations of classic dishes, crafted with the finest ingredients and authentic regional flavours.

The reopening was marked with a special ceremony, celebrating the return of one of the city’s most cherished Indian dining destinations-now reimagined, revitalised, and ready to welcome guests to an exceptional gastronomic journey.

The Colombo Stock Exchange yesterday granted approval to list LOLC Finance’s planned Rs. 15 billion debenture issue which opens on 2 December.

The Central Bank had already approved the issuance of up to 150 million listed, rated, senior, unsecured, redeemable five-year debentures.

The company will issue 100 million debentures at Rs. 100 each, with the option to offer a further 50 million in the event of an oversubscription, allowing the issuer to raise up to Rs. 15 billion. This is smaller than the Rs. 20 billion issue the company was seeking approval for in September.

The issue comprises three instruments: a five-year fixed-rate debenture at 11.25% payable annually (AER 11.25%); a five-year fixed-rate option at 10.95% payable semi-annually (AER 11.25%); and a floating-rate debenture priced at the 364-day Treasury Bill rate plus 2.50% payable annually. The subscription list opens on 2 December 2025.

The issue comes on the back of strong earnings. LOLC Finance posted an after-tax profit of Rs. 8.8 billion for the September 2025 quarter, a 106% year-on-year increase, while nine-month profit rose 72% to Rs. 14 billion. Total assets reached Rs. 466 billion and retained earnings were close to Rs. 82 billion. In its 2024/25 annual report, the company said it is laying the groundwork for growth through strategic partnerships, product expansion and wider distribution channels.

At the sixth Monetary Policy Review for 2025 announced yesterday, the Central Bank of Sri Lanka (CBSL) decided to hold the Overnight Policy Rate at 7.75%. This marked the third consecutive monetary policy decision to keep rates on hold. The Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR), which are linked to OPR with predetermined margins of ± 50 basis points, also remained unchanged at 7.25% and 8.25%, respectively. The statutory reserve rate was left unchanged at 2%.

The official press release stated the Board arrived at this decision after carefully considering evolving developments and the outlook on both domestic and global fronts. The Board is of the view that the current monetary policy stance will support steering inflation towards the target of 5%. The press release also noted the following: ‘Credit to the private sector has recorded a notable and broad-based expansion thus far in 2025, supported by the low-interest rate environment.

Imports have risen in recent months, contributing to a widening trade deficit. However, strong inflows from tourism and workers’ remittances have cushioned the impact on the external current account.

Gross Official Reserves were maintained above

$ 6 billion thus far in 2025, supported by net foreign exchange purchases by the Central Bank. Expected additional inflows in December 2025 include receipts from the multilateral organisations.’

The weighted average rates at the weekly Treasury bill auction conducted yesterday remained unchanged across the board. Accordingly, the yields on the 91-day, the 182-day and the 364-day tenors were recorded at 7.52%, 7.91% and 8.03%. This marks the 19th week where T-Bill rates have stayed broadly anchored around prevailing levels.

However, the auction was undersubscribed, raising only 64.32% or Rs. 55.637 billion out of the Rs 86.50 billion offered. This marks the fourth consecutive auction to undersubscribed while the bids received to offered amount ratio stood at 1.44 times.

The Phase II of subscription is now open across all three ISINs until 3.00 p.m. of business day prior to settlement date (i.e., 27.11.2025) at the WAYRs determined for the said ISINs at the auction.

This comes ahead of the Treasury Bond auction, scheduled to be conducted today (27 November). The round of auctions will have a total offered amount of Rs. 42 billion across three available maturities.

The auction will be comprised of:

Rs. 20 billion from a 1 March 2030 Maturity bearing a coupon rate of 9.50%

Rs. 22 billion from a 1 June 2033 Maturity bearing a coupon rate of 9%

The settlement for which will be held on 1 December 2025.

For context, the previous Treasury Bond auctions held on 13 November, with a total offered amount of Rs. 80 billion across two available maturities, was fully subscribed at the first phase in competitive bidding. Total bids received exceeded the offered amount by 2.73 times. This marked the first instance in 7 consecutive bond auctions to raise the entire offered amount.

Maturity-wise the results were as follows: The 01.07.30 maturity (9.75% coupon) maturity was issued at the weighted average rate of 9.56%. The entire maturity-wise offered amount of Rs. 35 billion was fully snapped up.

The 15.06.35 maturity (10.70% coupon) was issued at the weighted average rate of 10.69%. The entire maturity-wise offered amount of Rs. 45 billion was raised at the first phase.

The Secondary Bond market yesterday saw yields increase following the Monetary Policy Announcement mainly on the short end of the yield curve. However, the long end of the yield curve continued to consolidate and hold broadly steady. The transaction volumes were seen at healthy levels boosted by several block transactions on selected tenors.

In terms of the Secondary Bond market trade summary, the 01.05.27 and 15.09.27 maturities were seen trading at the rates of 8.69%-8.70% and 8.82% respectively. The 01.05.28, 01.07.28 and 15.12.28 maturities at the rates of 9.10%-9.14%, 9.10% and 9.15%-9.18%. The 15.06.29, 15.09.29 and 15.10.29 maturities were seen trading higher at the rates of 9.49%, 9.55% and 9.54% respectively. The 01.07.30 maturity was seen trading up the range of 9.60%-9.65%. The 15.03.31 maturity was seen changing hands at the rate of 9.94%. The 15.09.34 maturity was seen trading at the rate of 10.62% and the 15.06.35 maturity at the rate of 10.69%.

The total Secondary market Treasury Bond transacted volume for 25 November was Rs. 8.82 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 7.94% and 7.96% respectively.

The net liquidity surplus was recorded at Rs. 91.37 billion yesterday as an amount of Rs. 103.48 billion was deposited at Central Bank’s SDFR (Standing Deposit Facility Rate) of 7.25%. An amount of Rs. 12.11 billion was withdrawn from the Central Bank›s SLFR (Standard Lending Facility Rate) of 8.25%.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts closed depreciating marginally to 308.00/308.10. as against its previous day’s closing level of Rs. 307.90/308.00.

The total USD/LKR traded volume for 25 November 2025 was $ 68.50 million.

The Central Bank of Sri Lanka (CBSL) yesterday delivering the sixth and final Monetary Policy Review for 2025 announced that rates would remain unchanged at 7.75%.

The decision to hold policy rates steady was made at a Monetary Board review on Tuesday, after assessing both domestic and global developments.

The Board is of the view that the current monetary policy stance will help steer inflation towards the target of 5% in the period ahead, while supporting growth.

‘The decision is based on the progress seen so far this year and price stability and potential growth,’ Dr. Weerasinghe said during the post-Monetary Policy Review meeting media briefing yesterday.

He said stability is the most important foundation for sustainable economic growth. ‘We expect the economy to grow by 4.5% this year,’ he added.

He also said that further easing of rates is still possible as the country has now built sufficient buffers – monetary, reserves, and fiscal – if there are any global headwinds.

The CBSL Governor also explained that there is a lot of global uncertainty. However, Sri Lanka would not have a lot of impact as the country is not exposed to raise funds from the market. However, he said if the world economy slows down, it will have a negative impact on the external sector.

‘Thus, building buffers are important to make any adjustments if need arises. Before the economic crisis, we did not have any buffers and today, we are in a better position,’ he added.

As per the CBSL, headline inflation based on the Colombo Consumer Price Index (CCPI) continued to accelerate in October for the third consecutive month. Inflation is expected to rise more gradually than projected earlier and move towards the target by the second half of 2026. Core inflation is also expected to accelerate at a modest pace, as demand in the economy gradually strengthens. Medium-term inflation expectations remain well anchored around the inflation target.

‘Inflation is expected to rise more gradually than previously forecast but should reach the CBSL’s 5% target by the second half of 2026,’ Dr. Weerasinghe added.

Leading economic indicators suggest a continuation of the growth momentum.

Credit to the private sector has recorded a notable and broad-based expansion thus far in 2025, supported by the low-interest-rate environment.

Dr. Weerasinghe said the CBSL is monitoring the credit to GDP by the private sector. ‘Although it has expanded, it is still below average compared to 2016-2018 level. So, overall, we do not see any unnecessary growth or an economic overheating,’ he added.

The Governor also said the fiscal performance has been much better historically, noting that fiscal stability is always a positive factor for overall economic stabilisation.

‘This also reflects a recovery in economic activity as well as the realisation of pent-up demand for vehicle imports. This credit momentum is likely to continue in the period ahead,’ the CBSL said.

Imports have risen in recent months, contributing to a widening trade deficit. However, strong inflows from tourism and workers’ remittances have cushioned the impact on the external current account.

Gross official reserves were maintained above $ 6 billion thus far in 2025, supported by net foreign exchange purchases by the CBSL.

The CBSL expects additional inflows in December 2025, including receipts from the multilateral organisations.

The recent depreciation pressure on the rupee has subsided with the improvement in foreign exchange liquidity.

‘The CBSL will continue to monitor and assess incoming data on evolving domestic and global economic conditions and emerging risks. The Board remains prepared to implement appropriate policy measures to ensure that inflation stabilises around the target, while supporting the economy to reach its potential,’ it added.

Budget 2026 lays a foundation for SME growth, but its success will depend on implementation speed, transparency, and a shift from debt-driven support to capability-building and global integration. For SMEs, this Budget offers hope and opportunity-but turning policy into tangible outcomes requires collaborative effort between Government, financial institutions, and private sector stakeholders

Introduction

The 2026 National Budget, presented by President Anura Kumara Dissanayake, comes at a pivotal moment for Sri Lanka’s economy. Following two years of IMF-led reforms and a steady recovery trajectory, the Government has set ambitious goals: sustained GDP growth above 7%, fiscal consolidation, and integration into global value chains. But for the backbone of the economy-Small and Medium Enterprises (SMEs)-the question remains: Has the Budget 2026 provided sufficient support to drive resilience and growth?

Why SMEs matter

SMEs contribute over 52% of Sri Lanka’s GDP and play a critical role in employment generation. Their ability to thrive determines the pace of economic recovery and inclusive growth. However, SMEs have faced severe challenges since the 2022 crisis-tight credit conditions, high inflation, and limited market access. Budget 2026 needed to address these structural issues while fostering competitiveness.

President and Finance Minister Anura Kumara Dissanayake

Key SME-focused measures in Budget 2026

1. Lower investment threshold for tax incentives

The qualifying investment threshold for enhanced capital allowances has been reduced from $ 3 million

to $ 250,000, making tax incentives accessible to SMEs. Enhanced capital allowances of 100% (or 200% for Northern Province) can now be claimed for investments in fixed assets, in addition to standard capital allowances under the Inland Revenue Act.

2. Concessionary loan schemes

The Government has introduced loan facilities through local banks at concessional interest rates, offering:

Up to Rs. 25 million for successful businesses

Rs. 15 million for enterprises facing hardship

Up to Rs. 50 million for others

Additional schemes target youth entrepreneurship, women-led businesses, and microfinance initiatives, signaling a strong push for inclusive SME financing.

Budget 2026 allocates:

Rs. 7,700 million for the SME Development Loan Scheme

Rs. 6,200 million for Agricultural Value Chain Development

Rs. 15,000 million for the Pledge Loan Scheme for paddy mill owners

Rs. 800 million for the Sustainable Farmers’ Loan Fund

Rs. 1,700 million for the New Comprehensive Rural Credit Scheme (NCRCS), offering agricultural loans up to Rs. 3 million at 5% interest

These measures aim to ease liquidity constraints and foster inclusive growth, particularly in rural and agricultural sectors.

3. Institutional reforms for SME development

Budget 2026 proposes consolidating SME support agencies-IDB, NEDA, and SMED-under the Industrial Development Board to streamline services, reduce duplication, and improve efficiency in delivering technology, market access, and advisory support.

4. Digitalisation and market access

The Government plans to establish Startup Ecosystems, IT zones, and data centers, alongside a Digital Single Window for investment approvals. Export-oriented SMEs will benefit from the National Export Development Plan (2025-2029) and the introduction of a Trade National Single Window (TNSW) to simplify export documentation and reduce administrative bottlenecks.

Budget 2026 also emphasizes developing auxiliary zones linked to existing investment zones, creating opportunities for SMEs to integrate into industrial value chains, access shared infrastructure, and reduce operational costs.

Challenges and missed opportunities

Despite positive steps, concerns remain:

nIndirect Tax Burden: Lower VAT and SSCL thresholds (Rs. 36 million) will bring more SMEs into the tax net, increasing compliance costs.

nAccess to Credit: Effective implementation and timely disbursement of loans will be critical.

nExport Competitiveness: Tariff reforms and para-tariff phase-outs lack clear timelines, creating uncertainty for SMEs engaged in trade.

Lower inflation and interest rates should ease operating costs and improve credit access. However, broadening the VAT base without reducing the VAT rate adds pressure on SMEs and consumers. Given VAT’s regressive nature, a rate reduction would have provided meaningful relief.

Budget 2026 demonstrates intent to empower SMEs through lower investment thresholds, concessional financing, institutional reforms, and digitisation initiatives. However, success hinges on swift execution, ease of access, and complementary support in skills development and infrastructure

Global best practices for SME support

While concessional loans and tax incentives are important, global best practices show that SME development requires more than financial assistance. Countries such as Singapore and South Korea have

successfully empowered SMEs by providing:

nAccess to technical and managerial skills

nMentorship programs and international market exposure

nSupport for obtaining globally recognized certifications

In Singapore, programs like the Enterprise Development Grant (EDG) and Market Readiness Assistance (MRA) help businesses upgrade capabilities and expand internationally. SkillsFuture equips SME owners and employees with technical and business management skills, while certification support enables compliance with foreign market standards.

South Korea’s Ministry of SMEs and Startups (MSS) offers structured programs for technology development, global partnerships, and legal compliance. Initiatives such as the Global Corporate Collaboration Program and Startup Legal Support Program assist SMEs in forming international alliances and navigating regulatory requirements. These measures help SMEs build sustainable business models, enhance competitiveness, and reduce dependency on debt.

The way forward

Budget 2026 demonstrates intent to empower SMEs through lower investment thresholds, concessional financing, institutional reforms, and digitisation initiatives. However, success hinges on swift execution, ease of access, and complementary support in skills development and infrastructure.

The Government should actively facilitate:

nInternational market access: Promote Sri Lankan SMEs globally and assist with trade fair participation.

n Skill development: Offer training in technical, managerial, and digital skills.

nCertification assistance: Provide guidance and subsidies for international certifications.

nInnovation and technology adoption: Encourage digital transformation and sustainable practices.

Such measures will strengthen SMEs and position Sri Lanka as a dynamic player in the global economy.

Conclusion

Budget 2026 lays a foundation for SME growth, but its success will depend on implementation speed, transparency, and a shift from debt-driven support to capability-building and global integration. For SMEs, this Budget offers hope and opportunity-but turning policy into tangible outcomes requires collaborative effort between Government, financial institutions, and private sector stakeholders.

Sri Lanka’s total export earnings have surpassed US$14.4 billion in the first ten months of 2025, marking the highest level recorded for the period, Export Development Board (EDB) Chairman Mangala Wijesinghe announced.

Opposition Leader Sajith Premadasa yesterday unveiled a comprehensive national roadmap to transform Sri Lanka into a $ 25-30 billion digital economy by 2030, stressing that the country must urgently modernise its digital infrastructure, strengthen governance, and create high-value employment for its youth.

Speaking in Parliament, Sajith Premadasa said Sri Lanka has the potential to become a regional technology hub if it invests decisively in telecommunications upgrades, data centres, cloud infrastructure, artificial intelligence education and large-scale IT talent development.

He emphasised the need to expand 5G nationwide, incentivise fibre connectivity, partner with global cloud providers and establish tech investment zones across all 25 districts.

He called for a fully digitalised public service, including a national digital identity, digital signatures, inter-agency data platforms and 100% online access to government services such as licences, land registry work, court filings and permits.

Digital payment adoption, interoperable QR systems and fintech innovation were highlighted as essential to building a cashless economy and reducing corruption.

Sajith Premadasa also proposed establishing a national start-up fund, promoting AI, fintech, agri-tech and health-tech ventures, offering tech visas to global experts, and boosting IT-BPM exports from $ 1.8 billion to $ 10 billion by 2030.

He underscored the importance of digitalising traditional sectors like agriculture, tourism and fisheries, improving cybersecurity, updating outdated laws and expanding digital literacy nationwide.

Sajith Premadasa said the SJB stands ready to lead Sri Lanka into a modern digital era, adding, ‘It’s time to walk the talk and make our digital dream a reality.

President Anura Kumara Dissanayake will attend the Sri Lanka Economic and Investment Summit 2025 on 2 December, during which he will join The Ceylon Chamber of Commerce Vice Chairperson Bingumal Thewarathanthri for an on-stage conversation aligned with the Summit’s theme – ‘Gateway to Growth – Asia’s Emerging Opportunity.’

The conversation is expected to give participants a clearer sense of how the Government views the next phase of economic rebuilding, the pressures shaping policy choices, and the path the country hopes to take to restore confidence.

It offers businesses and investors the opportunity to hear the President explain the thinking behind policy choices at a moment when investors are looking for clear signals and predictability.

Conceptualised as a Fireside Chat, dialogues such as this play an important role because Sri Lanka’s recovery depends on rebuilding trust.

The dialogue aims to offer a window into how the country intends to move forward on investment, trade, and overall economic revival. Bringing Government leaders, international delegates, and the private sector into the same room helps close the gap between policy intention and what businesses experience on the ground.

The Sri Lanka Economic and Investment Summit 2025, organised by The Ceylon Chamber of Commerce, will take place on 2-3 December at Shangri-La Hotel Colombo. This year’s edition has already drawn more than 850 participants and over 100 international delegates, a turnout that reflects growing interest in Sri Lanka’s direction.

KBSL Information Technologies, one of Sri Lanka’s longest-standing systems integrators and a member of the Agility Innovation Group, has appointed Pramukh Jayawardena as its new Chief Sales Officer (CSO).

This move reflects the company’s strategy to strengthen its leadership for a new phase of growth focused on technology excellence and customer value. “Pramukh brings the proven record and versatile depth we need to lead our sales organisation,” said KBSL COO and Acting CEO Aruna Dissanayake. “His ability to build high-performing teams and transform enterprise sales into consultative partnerships is essential. His expertise will be key in guiding our clients to make the best use of the strong application ecosystem we bring to the table on top of the next-generation green, intelligent, and cost-effective and secure infrastructure solutions to accelerate their innovation and deliver greater value.”

Jayawardena brings over 16 years of experience from the region’s top technology firms, with a record of building high-performing sales teams and driving business growth through innovation. His previous leadership roles include Millennium IT ESP, WSO2, Dialog Enterprise, H One, and Metropolitan Computers, covering enterprise technology and large-scale B2B transformation. Notably, he led sales for the SAARC region at WSO2, building partnerships and accelerating market growth. His background is noted for its versatility and depth, ranging from frontline sales to executing large-scale revenue strategies. He earned multiple awards recognising his performance and leadership impact. His journey reflects both depth and versatility, underscoring his ability to translate complex business challenges into achievable, customer-focused outcomes.

Jayawardena joins KBSL at a crucial time, as the company expands its focus on enterprise technology, cloud platforms, and digital transformation. His vision centers on translating business goals into tangible value for customers. In the short term, he plans to sharpen the sales function by optimising processes and focusing on measurable, data-driven decisions. His longer-term strategy emphasises sustainable, scalable growth that balances technology with human insight.

His strategic roadmap for KBSL emphasises five pillars of transformation: building a customer-centric culture, developing a strong partner ecosystem, investing in digital sales enablement, nurturing talent and leadership, and driving data-informed decision-making across the organisation.

“Sales is no longer about closing deals, it’s about solving problems,” Jayawardena explained. ‘Enterprises are looking for partners who understand their challenges and can connect innovation to measurable business results. That’s where KBSL can make the difference by combining our technical depth with a customer-first approach. We don’t just build relationships, we forge partnerships that empower our clients to achieve their most ambitious goals. Our vision is to be the trusted advisors and problem-solvers that our clients turn to first, every time,’ he said.

He believes enterprise technology sales must transform from a transactional process into a consultative partnership, where technology becomes a driver of customer outcomes. He added that technologies like AI, automation, cloud-native platforms, and advanced analytics will define the next phase of enterprise growth, and KBSL is positioned to help organisations harness these capabilities for transformation and resilience. Jayawardena is a Chartered Marketer (ACMA, CIM UK) and holds an MBA from Cardiff Metropolitan University (UK). His leadership philosophy, which centers on collaboration, curiosity, and accountability, complements his pragmatic, people-oriented style. These values align with KBSL’s mission to empower teams and customers alike to succeed in the digital age.

KBSL Information Technologies Ltd., is a leading force in Sri Lanka’s ICT landscape, delivering transformative solutions that power enterprise resilience and national infrastructure advancement. With over three decades of experience, KBSL specialises in integrated technology services spanning cloud architecture, data center modernisation, smart building systems, and managed IT operations.

Recognised for its strategic approach to digital enablement and operational excellence, KBSL continues to strengthen its partner ecosystem with global technology leaders to deliver best-in-class solutions locally.

As Sri Lanka accelerates its digital journey, KBSL remains a trusted partner in shaping a secure, scalable, and future-ready ecosystem that enables organisations to innovate with confidence.