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Rupee will reverse gains and plummet 20%, Fitch says

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Sri Lanka’s rupee, which became the world’s best performing currency this year amid hopes of an International Monetary Fund bailout, may resume declines and lose a fifth of its value against the dollar by end-2023, according to Fitch Solutions.

“We are optimistic that Sri Lanka will be able to secure an IMF board approval by early 2Q 2023,” said Seah Wang Ting, country risk analyst at Fitch Solutions told Bloomberg. Nevertheless, there’s potential for disruptions after the initial board approval as authorities may find it challenging to stay on track with the IMF programme amid a weakening economy and a local election likely on the horizon, he said.

Fitch maintained its forecast for the rupee to weaken to a record low of 390 per dollar by year-end. The rupee advanced 3% to 317.7 per dollar on Wednesday, taking its annual gains to over 15%. That’s after the IMF said it plans to decide on a $2.9 billion bailout for Sri Lanka following China’s assurance that it would support the nation’s debt restructuring.

Sri Lanka has increased taxes, cut energy subsidies and loosened its grip on the currency to secure the IMF loan. The central bank recently lifted borrowing costs further to ensure that inflation which has slowed from nearly 70% doesn’t flare up.

“Sri Lanka still has significant external debt repayment needs and will need to build up its foreign reserve buffer over the coming months, which would put downside pressure on the exchange rate,” Fitch said in a report Wednesday.

Sri Lankan President Ranil Wickremesinghe said on Tuesday the country needs to repay about $6 billion-$7 billion foreign loans on average each year until 2029.

The Sri Lankan rupee may also be pressured by tightening global monetary conditions, according to Fitch. Federal Reserve Chair Jerome Powell told the Senate Banking Committee on Tuesday that the ultimate level of interest rates is likely to be higher than previously anticipated.



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Advisory for Severe Lightning for the Western and Sabaragamuwa provinces and Galle and Matara districts

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Advisory for Severe Lightning
Issued by the Natural Hazards Early Warning Centre  at 12.00 noon 07 February 2026 valid for the period until 11.00 p.m. 07 February 2026

Thundershowers accompanied with severe lightning are likely to occur at some places in the Western and Sabaragamuwa province and in Galle and Matara districts.

There may be temporary localized strong winds during thundershowers.

The general public is kindly requested to take adequate precautions to minimize damages caused by lightning activity.

ACTION REQUIRED:

The Department of Meteorology advises that people should:
 Seek shelter, preferably indoors and never under trees.
 Avoid open areas such as paddy fields, tea plantations and open water bodies during thunderstorms.
 Avoid using wired telephones and connected electric appliances during thunderstorms.
 Avoid using open vehicles, such as bicycles, tractors and boats etc.
 Beware of fallen trees and power lines.
 For emergency assistance contact the local disaster management authorities.

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INS GHARIAL departs island

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The Indian Naval Ship (INS) GHARIAL which made a port call in Colombo, departed the island on 06 Feb 26.

The Sri Lanka Navy bade a customary farewell to the departing ship at the Port of Colombo, following naval traditions.

During the ship’s port call, the crew took a sightseeing tour of key attractions in Colombo.

The visit also featured the handover of ten temporary Bailey Bridges, which were brought by INS GHARIAL, in coordination with the High Commission of India in Sri Lanka.

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Stop the collection of funds from parents at school level for Smart Boards — PM

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Prime Minister Dr. Harini Amarasuriya stated that the Ministry of Education has already commenced the distribution of Smart Boards required for the new education reforms, and that the collection of funds from parents at school level for this purpose must be stopped immediately. She further emphasized that no decision has been taken to curtail free education or to close the Jayewardenepura Faculty of Dental Sciences.

The Prime Minister made these remarks in response to a question raised in Parliament on Thursday [05th  February]  by the Leader of the Opposition,  Sajith Premadasa.

Elaborating further, the Prime Minister stated,

“Although the Leader of the Opposition has not traditionally upheld free education as a policy, I appreciate your stance on the matter at this juncture. However, I urge that questions should not be raised based on social media content or unverified rumours in Parliament. No decision has been taken to curtail free education or to close the Jayawardenepura Faculty of Dental Sciences. The Medical Faculty of the Wickramarachchi University of Indigenous Medicine had commenced operations without regulatory approval and had introduced course work, resulting in students being placed in a vulnerable situation. Necessary action is currently being taken based on the recommendations of a report submitted by an expert committee appointed to examine the issue. This this is not a political decision, but one guided by expert opinion”.

“Arrangements are underway to distribute the required Smart Boards to schools during this year, and  there is no need to collect funds from parents for this purpose. If any such collections are taking place, they must be stopped immediately. The Secretary to the Ministry of Education has already issued a directive instructing schools not to collect funds from parents”.

“The subject Information Technology will not be taught as a separate subject for Grades 1 to 5. However, recognizing the need to prepare students for a globally advancing technological world, discussions have been initiated based on expert advice on how to provide age-appropriate technological awareness to students. Decisions will be made after carefully considering child protection concerns and expert recommendations. The curriculum-related decisions will not be made politically, but by subject experts.

Based on the requests made by the universities and higher education institutions recruitment for essential academic vacancies is currently being carried out under the Cabinet approval. Although thirty years have passed since the establishment of the teacher service, further measures are required to enhance its quality. Existing issues relating to teacher promotions, considering the practical difficulties in evaluation processes and non-compliance with service minute provisions are being addressed alongside other challenges. The government is presently focused on formulating a systematic plan to ensure quality education.”

Responding to a question raised by the Member of Parliament Kader Mastan, the Prime Minister stated,

“Several programmes have been introduced based on government policy decisions to fulfill the basic needs of schoolchildren. These include the provision of school textbooks, uniforms, and the “Suraksha” health insurance scheme. Additionally, voucher schemes have been introduced to support the purchase of sanitary products for girls in Grades 6 to 13. Midday meals are also being provided for primary school students, and financial assistance is extended to students who pass the Grade 5 Scholarship Examination but do not receive bursaries. The Ministry of Education is in the process of gathering further information with the intention of expanding these programmes”.

The Prime Minister also announced that the 2025 G.C.E. Ordinary Level Examination is scheduled to be held from February 17 to 26. Although this period coincides with the observance of Ramadan, relevant authorities have confirmed that it will not pose an obstacle to the conduct of the examination. Furthermore, it has been decided to hold the Grade 5 Scholarship Examination and the G.C.E. Advanced Level Examination before August each year, and the G.C.E. Ordinary Level Examination in December. From 2026 onwards, efforts will be made to conduct examinations in accordance with this revised annual examination calendar.

[Prime Minister’s Media Division]

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