The Sri Lankan Rupee strengthened significantly against the United States Dollar on Friday (May 22), becoming Asia’s best-performing currency for the day, according to Bloomberg News.
According to the report, the rupee appreciated by approximately 2.7%, marking its largest single-day gain since March 2023.
The recovery came after the currency had depreciated continuously for nine consecutive days amid global market pressures linked to the Iran conflict and rising oil prices.
Anil Jayantha Fernando stated that the strengthening of the rupee was mainly driven by market participants selling U.S. dollars while anticipating future financial inflows from the:
- International Monetary Fund
- Asian Development Bank
The Deputy Minister noted that currencies across Asia had faced severe pressure due to global oil market instability triggered by the Iran war situation.
Earlier in 2026, the Sri Lankan rupee had become one of the weakest-performing currencies in Asia amid:
- Rising fuel import costs
- Increased vehicle imports
- Strong demand for foreign exchange
- Global geopolitical uncertainty
To manage the situation, the government has already:
- Imposed a customs duty surcharge on private vehicle imports
- Announced plans for intervention by the Central Bank of Sri Lanka in the foreign exchange market to reduce excessive volatility
The government has also reiterated its commitment to maintaining overall financial stability.
Meanwhile, the Central Bank is scheduled to announce its latest monetary policy decision on May 26.
Economic analysts believe the rupee could stabilize further in the coming months due to:
- Expected foreign financial assistance
- Possible tightening of monetary policy
- Improved foreign exchange inflows from multilateral institutions and remittances
