The Sri Lankan rupee, which remained relatively stable in early 2026, has come under moderate depreciation pressure following the escalation of the Middle East conflict, according to the Central Bank’s March 2026 Monetary Policy Review.
Data shows the US dollar was trading at around Rs. 314.2 as of March 25, reflecting a shift from earlier stability as global developments began to influence foreign exchange markets.
The Central Bank noted that pressure on the rupee intensified with the escalation of the conflict, mirroring broader regional and global trends.
In 2025, the rupee depreciated by 5.6%. In 2026 so far, it appreciated slightly by 0.2% between the end of February and end of March, but overall recorded a 1.6% depreciation from the end of 2025 to March 25.
Other regional currencies have experienced similar trends. The Malaysian ringgit declined by 9.9% in 2025 and 1.6% so far in 2026, while the Indonesian rupiah weakened by 3.6% in 2025 and 0.6% this year.
The Indian rupee also depreciated by 4.7% in 2025 and 3.1% in 2026 to date. Several other currencies, including the Thai baht, Philippine peso, Pakistani rupee, Bangladeshi taka, Vietnamese dong and Nepalese rupee, have also shown varying levels of depreciation.
Despite these pressures, the Central Bank noted that the rupee’s overall movement in the first half of 2026 remains relatively moderate compared to some regional currencies.
