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Rupee volatility exposes deeper structural weaknesses, says fintech industry leader

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The continued depreciation pressure on the Sri Lankan rupee is exposing deep-rooted structural weaknesses within the economy, while simultaneously creating limited opportunities for export-oriented sectors, according to Rajkumar Kanagasingam.

Kanagasingam warned that while some export industries may temporarily benefit from a weaker currency, the broader economic strain caused by rising import costs, inflationary pressures, and investor uncertainty continues to weigh heavily on businesses and consumers alike.

Speaking to The Island Financial Review, he said local industries are struggling to absorb rising costs linked to imported raw materials, machinery, fuel, and intermediate goods as the rupee remains under pressure.

“Local industries are coping through cost-cutting measures, selective price increases, tighter inventory management, and delaying certain capital investments,” he said. “Many businesses are also exploring alternative suppliers and improving operational efficiency to manage rising import-related costs.”

He noted that import-dependent sectors are among the hardest hit by currency depreciation, particularly construction, transport, pharmaceuticals, manufacturing, and food imports, where businesses face mounting operational expenses and shrinking margins.

At the same time, Kanagasingam observed that export-oriented sectors such as apparel, tea, IT services, tourism, and businesses promoting local substitutes may gain some competitive advantage from the weaker rupee, as foreign exchange earnings translate into higher rupee revenues.

“A weaker rupee can improve the competitiveness of export-oriented sectors by increasing rupee earnings from foreign exchange,” he explained. “However, the benefits may be partially offset by higher imported input costs, energy expenses, and broader economic pressures.”

He stressed that small and medium-scale enterprises (SMEs) remain significantly more vulnerable than larger corporates during periods of currency instability.

“SMEs generally have limited financial buffers, less access to foreign currency, and weaker bargaining power,” he said. “Larger corporates are typically better positioned to manage exchange rate fluctuations through stronger reserves, export earnings, and diversified financing options.”

Kanagasingam added that consumers are ultimately carrying much of the burden created by rupee depreciation, with higher prices increasingly visible across food, transport, utilities, imported goods, and daily services.

“In many cases, increased business costs are gradually passed on to consumers,” he said, warning that sustained currency weakness could continue to fuel inflationary pressure across the economy.

He also pointed to a growing shift among local manufacturers toward localization and import substitution as businesses attempt to reduce reliance on imported inputs.

“There is growing interest in strengthening domestic supply chains and local production,” he noted. “However, Sri Lanka still faces challenges in terms of industrial scale, technology, and the availability of locally sourced raw materials.”

According to Kanagasingam, persistent currency volatility also undermines investor confidence and complicates long-term industrial planning.

“Currency fluctuations create uncertainty for investors, particularly in areas such as pricing, financing, debt servicing, and long-term project planning,” he said. “Greater exchange rate stability generally improves investor confidence and supports long-term industrial growth.”

He urged policymakers and the Central Bank to prioritize macroeconomic stability, foreign reserve strengthening, export expansion, energy efficiency, and targeted support for SMEs in order to cushion the impact of exchange rate volatility.

“The priority should be maintaining macroeconomic stability, strengthening foreign reserves, supporting export growth, improving energy efficiency, encouraging local production, and providing targeted support for SMEs,” he said. “Consistent and predictable policy measures are also essential to strengthen investor confidence.”

Kanagasingam further cautioned that prolonged rupee depreciation could eventually lead to job losses in sectors heavily dependent on imports.

“Prolonged depreciation could place pressure on import-dependent industries, potentially leading to reduced production, delayed expansion, and job losses, particularly among smaller businesses and vulnerable sectors,” he warned.

Describing the current exchange rate situation as more than a temporary market adjustment, Kanagasingam said Sri Lanka must address its long-standing structural vulnerabilities if it hopes to achieve lasting currency stability.

“It reflects both short-term external pressures and deeper structural challenges within the economy,” he said. “These include high import dependence, limited export diversification, debt-related pressures, and the need for stronger foreign exchange generation over the long term.”

Economic analysts note that the rupee’s trajectory in the coming months will remain closely tied to external debt management, reserve accumulation, export performance, remittance inflows, and broader investor sentiment surrounding Sri Lanka’s economic recovery efforts.

By Ifham Nizam



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Kandy driving school hits 100,000-driver milestone, sets sights on expansion

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RWMNJ Bandara MD Dhasuini Driving School

Dhasuni Learners in Kandy have trained over 100,000 drivers, marking a major milestone in the institution’s journey from a modest start-up to one of the region’s leading driver education providers.

Founded on March 31, 2008, in the historic hill capital, the institution began with just a single van, one three-wheeler and one motorcycle. Built on what its founder describes as a commitment to road safety and public service, the driving school has since expanded into a multi-branch operation with six centres across the Kandy district.

Today, Dhasuni Learners has emerged as a significant player in Sri Lanka’s driver training sector, producing thousands of licensed motorists annually while also contributing to local employment generation. The organisation’s broader mission, according to its management, has been to foster disciplined and road-conscious drivers who adhere to traffic regulations.

Over the years, the institution has received multiple accolades for its service standards and entrepreneurial achievement. These include the ‘Best Young Entrepreneur Award’ and ‘Seva Taru Tuthe Award’ in 2018, followed by One-Star and Two-Star service ratings from the Ministry of Industries in 2019 and 2020. It has also secured top rankings from the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) at national and provincial levels.

More recent recognitions include the ‘Best Driving School Award’ in 2023 and the ‘Pitkal Award’ for business excellence, along with a 2025 honour from the Trade Front in collaboration with the Ministry of Industry.

by SK Samaranayake

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HNB Life Introduces “Privileged Protect”, a Future-Ready Protection Solution for a New Generation

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Marking a significant milestone in its journey as it celebrates 25 years of trust and transformation, HNB Life has introduced Privileged Protect, a novel universal life insurance solution designed to meet the evolving financial and protection needs of modern Sri Lankans.

Developed as an evolved protection offering, Privileged Protect combines short-term premium commitments with long-term financial security, giving customers the flexibility to build wealth while safeguarding their future and loved ones.

Designed for individuals seeking comprehensive life protection with greater financial convenience, the product offers a shorter premium paying term while ensuring continued long-term coverage and investment growth opportunities. The policy also includes six compulsory protection benefits, dividend and loyalty dividend entitlements, partial withdrawal facilities after five years, and the ability to convert the maturity value into a monthly income stream. Customers are also provided the flexibility to continue optional riders beyond the premium paying term and enhance their investment through top-up premiums.

Commenting on the launch, Lasitha Wimalaratne, Executive Director / Chief Executive Officer of HNB Life, stated, “As we embark on a bold new chapter as HNB Life, the introduction of Privileged Protect reflects our commitment to continuously evolve alongside the changing aspirations of our customers. Today’s customer seeks greater flexibility, stronger protection, and smarter financial planning solutions that align with their lifestyle and long-term goals. This product has been thoughtfully designed to address those expectations while delivering the security and confidence our policyholders value. As we celebrate 25 years of excellence, we remain focused on shaping the future of insurance through innovative solutions that are relevant, accessible, and future-ready.”

Also sharing his thoughts, Dinesh Udawatta, Executive Vice President / Chief Technical Officer stated, “The modern customer is increasingly looking for insurance solutions that go beyond traditional protection. Privileged Protect is an evolved offering built around convenience, flexibility, and long-term value creation. It is designed for individuals who want to secure their future with shorter payment commitments while continuing to enjoy meaningful protection and wealth accumulation benefits. As HNB Life, we are committed to introducing customer-centric innovations that empower Sri Lankans to confidently plan for the future.”

With the launch of Privileged Protect, HNB Life continues to strengthen its portfolio of future-focused insurance solutions, reinforcing its commitment to protecting lives while empowering customers to achieve long-term financial wellbeing in an ever-evolving world. HNB Life PLC is licensed by the IRCSL and all policyholders are advised to read the policy document before concluding a sale to understand benefits, exclusions, terms and conditions.

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Sri Lanka’s Nazri Nizar elected to YPO global board in historic first

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Nazri Nizar

For the first time in the 76-year history of the Young Presidents’ Organisation (YPO), a Sri Lankan has been elected to its global board, with business leader Nazri Nizar securing a position on the governing body of one of the world’s most influential leadership organisations.

The appointment was confirmed at the YPO Annual General Meeting held on 21 May 2026. Nizar will serve as a YPO global board director from 2026 to 2029 and will concurrently serve as chair of the YPO Global Forum Committee.

Founded in 1950, YPO is a global leadership community comprising more than 38,000 chief executives, entrepreneurs and business leaders across 150 countries. Collectively, its members lead organisations generating approximately US$9 trillion in annual revenue, placing YPO among the most influential peer leadership networks in the world.

Unlike traditional business associations, YPO is built around the philosophy that leadership is a lifelong pursuit. Through a combination of executive education, peer learning and confidential leadership forums, the organisation provides a platform for business leaders to learn from one another’s experiences and navigate the personal and professional challenges that accompany leadership. At a time when organisations are navigating unprecedented technological, economic and social change, platforms such as YPO continue to underscore the importance of learning, collaboration and leadership across borders.

Nizar’s election follows years of service within the organisation. He has previously served as chapter chair of the YPO Colombo Integrated Chapter, been a member of the YPO South Asia Regional Board and, most recently, served on the YPO Global Forum Committee. In addition to his responsibilities as a global board director, Nizar will lead the Global Forum Committee, which oversees one of YPO’s most valued and enduring member experiences.

Commenting on the appointment, Nizar said YPO had played a defining role in shaping his leadership journey.

“YPO taught me that leadership is not about having all the answers. It is about continuous learning, trusted relationships and the willingness to grow through the experiences of others,” he said.

Describing the appointment as both humbling and inspiring, Nizar said he hoped the milestone would encourage more Sri Lankan leaders to engage with global platforms, contribute to international conversations and share their experiences with peers around the world.

Nizar currently serves as group managing director of Richardson Holdings, a diversified Sri Lankan enterprise with interests spanning engineering, infrastructure, renewable energy, manufacturing and out-of-home advertising.

His election represents a notable achievement for Sri Lankan business leadership and reflects the increasing contribution of Sri Lankan executives within international leadership networks.

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