The Sri Lankan rupee came under renewed pressure recently, depreciating significantly against the US dollar across several commercial banks, with the greenback’s selling rate reaching as high as Rs. 340 in some instances, triggering concerns among businesses, industrialists and consumers over the potential impact on inflation, electricity tariffs and the broader economy.

The latest depreciation marks one of the sharpest daily movements in recent months and comes at a time when Sri Lanka is striving to consolidate economic gains achieved through painful fiscal and monetary reforms.

Banking and financial sector sources said increased demand for foreign exchange, coupled with market uncertainty and rising import requirements, had contributed to the weakening of the local currency.

The development is expected to increase the cost of imports across a range of sectors, including fuel, pharmaceuticals, food items, industrial raw materials and machinery.

Economists note that while exporters may benefit from higher rupee returns on foreign currency earnings, the wider economy is likely to face increased cost pressures.

“The exchange rate affects virtually every sector of the economy. Any sustained depreciation inevitably filters through to consumer prices and business operating costs, a senior financial analyst said.

Particular concern is being expressed within the energy sector, where electricity generation costs remain closely linked to movements in the exchange rate.

Sri Lanka continues to rely heavily on imported fuel and energy-related inputs, all of which are purchased in foreign currency. A weaker rupee therefore translates directly into higher generation costs for the power sector.

Energy economists warn that if the depreciation trend continues, the financial burden on the electricity sector could increase substantially, potentially paving the way for future tariff revisions.

The issue has gained added significance amid ongoing discussions on Sri Lanka’s long-term energy transition and commitments to reduce dependence on coal-fired power generation.

Several energy experts argue that the country is entering a delicate phase where policymakers must carefully balance environmental objectives with affordability and energy security.

According to industry observers, the gradual move away from coal-based electricity generation—supported by international climate financing frameworks and policy reforms associated with multilateral lending programmes—could increase the country’s exposure to imported fuel costs unless sufficient low-cost alternatives are developed in time.

They point out that coal has historically provided relatively inexpensive baseload power to the national grid. While renewable energy sources such as solar and wind are essential components of Sri Lanka’s future energy strategy, experts note that large-scale storage systems and backup generation capacity remain costly and technologically demanding.

As a result, any future reduction in coal-based generation without corresponding investments in affordable alternatives could place additional pressure on electricity prices.

The latest weakening of the rupee further compounds these concerns.

“Every depreciation of the rupee increases the local currency cost of imported fuel, spare parts, equipment and energy-sector obligations. Ultimately, those costs have to be absorbed either by the utility provider, the Treasury or consumers, an energy sector specialist observed.

Industrialists have meanwhile warned that rising electricity costs could affect competitiveness, particularly among export-oriented manufacturers that are already operating under challenging global market conditions.

By Ifham Nizam

John Keells Consumer Foods Sector has reinforced its commitment to building future ready leadership with the successful graduation of 36 participants from the “Aspire” Executive Development Programme 2025, a sector wide Talent Development initiative conducted in collaboration with the Postgraduate Institute of Management, University of Sri Jayewardenepura.

The graduation marks a significant milestone in the sector’s ongoing people development journey, reflecting its focus on strengthening leadership capabilities, business acumen, strategic thinking and cross functional collaboration among emerging executives. Designed to align individual growth with evolving business priorities, the programme combined academic learning, interactive engagement and action driven projects which enabled participants to apply leadership concepts to real business contexts.

Operating under John Keells Holdings PLC, the John Keells Consumer Foods Sector comprises leading food and beverage brands such as Elephant House and Keells Krest with a strong legacy in Sri Lanka. Through initiatives such as “Aspire”, the sector continues to invest in structured learning and capability building as key enablers of sustainable business growth and long-term organizational resilience.

Daminda Gamlath, President, John Keells Consumer Foods Sector, said, “The Aspire Executive Development Programme reflects our belief that future growth must be supported by strong, agile and purpose driven leaders. We are proud to celebrate the graduation of these 36 participants, who have demonstrated commitment, curiosity and the ability to think beyond their functional roles. Their development is an investment not only in their individual careers, but also in the continued progress of our businesses.”

Imani Perera, Head of Human Resources, John Keells Consumer Foods Sector, said, “Aspire” was designed to unlock both individual and collective potential by giving our executives the tools, exposure and confidence to lead with greater impact. The successful completion of this programme is a testament to our continued focus on nurturing talent from within and preparing our people for future leadership roles with greater responsibilities.”

The sector will continue to advance its people development agenda through structured learning, leadership development and capability building initiatives that support business growth and prepare employees for Future strategic roles.

CSE trading yesterday turned lustreless because of external and internal environmental issues, which resulted in investors are taking their profits.

Consequently, mixed reactions were noted in both indices. The All Share Price Index went down by 7.33 points, while the S and P SL20 rose by 0.09 points. The rupee depreciation is also one of the reasons for the downward trend, market analysts said.

Turnover stood at Rs 2.97 billion with eleven crossings. Top seven crossings were: JKH crossed 33.1 million shares to the tune of Rs 151.5 million; its shares traded at Rs 20, Amana Takaful 7 million shares crossed to the tune of Rs 154 million; its shares traded at Rs 22, Digital Mobility Solutions 750,000 shares crossed for Rs 123.8 million; its shares sold at Rs 165, Kelani Valley Plantations 102 million shares crossed to the tune of Rs 105 million; its shares traded at Rs 85, ACL Cables 1 million shares crossed for Rs 96 million; its shares traded at Rs 96 CCS 620,000 shares crossed for Rs 84 million; its shares traded at Rs 136.75 and HNB 100,000 shares crossed to the tune of Rs 39 million; its shares fetched Rs 390.

In the retail market top seven companies that mainly contributed to the turnover were: Access Engineering Rs 234 million (3.1 million shares traded), CCS Rs 132 million (959,000 shares traded), JKH Rs 106 million (5.3 million shares traded), Digital Mobility Solutions Rs 89 million (541,000 shares traded), Sunshine Holdings Rs 59 million (1.9 million shares traded), Haycarb Rs 58 million (399,000 shares traded) and Alumax Rs 50 million (3.3 million shares traded). During the day 112.6 million share volumes changed hands in 19158.

It is said that manufacturing sector counters, especially JKH performed well, while the FMCG sector, including CCS, performed well at the floor. Further, plantations sector counters, especially Kelani Valley, impressed.

Yesterday the rupee was quoted at Rs 336.00/338.00 to the US dollar in the spot market on, weaker from Rs 36.90/337.50 the previous day, dealers said, while bond yields were somewhat steady.

The telegraphic transfer rate for Sri Lanka’s rupee against the US dollar was Rs 332.50 buying, Rs 341.50 selling; euro was Rs 383.7459 selling, Rs 397.6629 buying; and the pound Rs 445.3974 buying and Rs 459.4430 selling.

By Hiran H. Senewiratne