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Home Insights Financial & Economic Analysis — March 2026
Monthly Briefing

Financial & Economic Analysis — March 2026

Aaron Russell-Davison Editor · Managing Director, SRP International
Prepared by·SRP Research Designed by·SRP Studio Editor·Aaron Russell-Davison — Managing Director, SRP International Period·March 2026

Executive Summary

Equity Markets

March 2026 was a highly volatile month for Sri Lanka's capital market, as the fallout from the US–Iran conflict hurt investor sentiment and pressured equities, energy, tourism, and inflation. Against this backdrop, the Colombo Stock Exchange experienced a steep correction, with the ASPI falling 2,667.9 points, or 11.2% MoM, to close at 21,066.2. Market capitalisation declined by over LKR 900 Bn during the month.

Inflation

CCPI headline inflation accelerated to 2.2% YoY in March 2026 from 1.6% in February, driven mainly by broad-based price increases in fuel, electricity, freight, and transport. Food inflation rose to 0.7% from 0.2%, while non-food inflation increased to 2.9% from 2.3%. However, the overall inflationary impact remains partly moderated by fiscal absorption, conservation measures, fuel rationing, and the expected recovery in hydropower generation.

Exchange Rates

The LKR displayed mixed performance in March 2026, with the most notable move being a 1.9% depreciation against the US dollar, closing at LKR 315.19/USD while remaining broadly stable against other major currencies. The rupee appreciated modestly against the GBP (0.16%), EUR (0.85%), AUD (1.65%), and SGD (0.14%). March's currency pressure stemmed primarily from USD strength, which is a natural tendency in times of geopolitical stress.

Crude Oil Prices

Brent crude prices surged 42.6% MoM in March 2026 to USD 103.94/bbl, primarily driven by acute supply-side disruptions stemming from the conflict in the Strait of Hormuz. While sentiment improved modestly on reports of ongoing negotiations towards a 45-day truce between the US and Iran, underlying market risks remain elevated. Iran's continued rejection of US demands and the effective closure of the Strait of Hormuz continue to pose significant downside risks to supply visibility and price stability. The likelihood of heightened energy prices has the capacity to damage the Sri Lankan (and global) economy in the medium term.

Tourist Arrivals

Sri Lanka's tourism sector witnessed a marked slowdown in March 2026, with arrivals declining 19.8% YoY to 183,979, due to Middle East-related disruptions to global transit routes. Nevertheless, cumulative arrivals in Q1 2026 remained marginally positive, increasing 2.5% YoY to 740,634, underpinned by resilient regional demand, particularly from India and the United Kingdom.

Market Statistics

Month EndingMarch-2026February-2026Change (%)
All Share Price Index21,066.1823,734.06-11.24%
S&P 20 Index5,904.106,635.97-11.03%
Consumer Services (Hotels)537.44636.77-15.60%
Real Estates3,286.413,991.85-17.67%
Capital Goods (Industrial)2,162.732,565.28-15.69%
Food Bev & Tob (Plantations and Other)2,193.102,362.73-7.18%
Materials2,819.763,257.34-13.43%
Banks1,777.121,952.38-8.98%
Telecommunication Services2,490.832,837.44-12.22%
Market Capitalisation (SLRs. Bn)7,522.008,425.24-10.72%

International Markets

MarketMarch-2026February-2026Change (%)
STI Index (Singapore)4,885.454,995.07-2.19%
DAX (Germany)22,680.0425,284.26-10.30%
Nikkei (Japan)51,063.7258,850.27-13.23%
FTSE 100 (UK)10,176.4510,910.55-6.73%
Dow Industrial (US)46,341.5148,977.92-5.38%

Exchange Rates

CurrencyMarch-2026February-2026Change (%)
Euro361.74364.86-0.85%
SNG$244.26244.61-0.14%
AUD216.35219.98-1.65%
GBP416.37417.04-0.16%
US$315.19309.311.90%

Quoted as LKR per unit of foreign currency; a higher figure indicates depreciation of the rupee.

Commodity Prices

CommodityMarch-2026February-2026January-2026
Brent Crude $/bbl103.9472.8869.33
Gold $/Troy oz4,674.205,275.304,895.20
Tea $/Kg2.692.702.73
Rubber, TSR20 $/Kg1.951.931.84

Interest Rates

Rate typeMarch-2026February-2026Change (%)
AWPR9.289.35-0.75%
AWDR—6.83—
Treasury Bill Yield
3 Months7.637.600.39%
6 Months7.907.890.13%
12 Months8.148.110.37%
Treasury Bond Yield
5 Years9.839.721.13%
10 Years10.8510.760.84%

AWDR = Commercial Bank Average Weighted Deposit Rate. AWPR = Commercial Bank Average Weighted Prime Lending Rate.

Inflation (Headline)

InflationMarch-2026February-2026Change (%)
Colombo Consumer Price Index (CCPI)2.201.6037.50%

Daily Indices

DayASPIS&P SL 20
Mar 3, 202622,442.366,313.65
Mar 4, 202622,600.556,357.66
Mar 5, 202622,824.556,425.80
Mar 6, 202622,717.176,360.75
Mar 9, 202621,979.116,128.86
Mar 10, 202622,397.516,280.42
Mar 11, 202622,346.096,279.70
Mar 12, 202622,017.606,172.28
Mar 13, 202621,692.556,084.65
Mar 16, 202620,957.085,884.93
Mar 17, 202620,433.785,760.99
Mar 18, 202620,754.045,765.57
Mar 19, 202620,247.115,651.41
Mar 20, 202620,680.085,752.19
Mar 23, 202620,388.165,686.82
Mar 24, 202621,115.845,909.23
Mar 25, 202621,871.886,134.23
Mar 26, 202621,419.946,035.52
Mar 27, 202621,394.175,999.99
Mar 30, 202621,110.955,908.96
Mar 31, 202621,080.335,904.10

Volume & Turnover

DayTurnoverVolume
Mar 3, 20269,560,729,835.20371,634,016.00
Mar 4, 20264,680,347,810.40171,265,230.00
Mar 5, 20265,682,716,024.70330,477,943.00
Mar 6, 20265,003,497,143.50196,425,409.00
Mar 9, 20265,807,630,532.35197,713,271.00
Mar 10, 20264,476,359,788.85236,201,571.00
Mar 11, 20264,319,832,894.10219,926,237.00
Mar 12, 20264,108,628,537.60139,701,446.00
Mar 13, 20265,267,434,467.80149,630,471.00
Mar 16, 20266,590,551,299.95588,027,051.00
Mar 17, 20265,028,809,061.00273,813,293.00
Mar 18, 20265,271,011,386.45216,287,412.00
Mar 19, 20263,945,546,415.55176,476,923.00
Mar 20, 20264,385,609,643.50215,215,369.00
Mar 23, 20262,371,083,789.8596,203,686.00
Mar 24, 20264,217,125,635.15193,419,872.00
Mar 25, 20266,419,229,070.30299,674,370.00
Mar 26, 20263,265,256,900.85176,326,037.00
Mar 27, 20262,674,735,655.65145,461,864.00
Mar 30, 20262,173,457,186.70100,353,155.00
Mar 31, 20263,571,950,584.85165,152,762.00

Tea Auction Prices (USD)

Month20262025202420232022202120202019
Jan2.732.782.662.772.862.682.512.54
Feb2.702.692.712.702.792.562.362.38
Mar2.692.692.692.692.612.432.132.38
April2.913.032.963.242.672.362.65
May3.023.202.712.992.712.512.73
June2.993.222.692.962.702.842.56
July3.023.302.473.312.653.042.58
Aug3.043.222.833.372.723.152.63
Sep2.943.272.853.332.733.082.54
Oct3.013.152.763.152.783.002.58
Nov2.993.092.743.052.832.782.61
Dec2.882.962.712.952.822.652.57

Tourist Arrivals

Tourist Arrivals2026202520242023202220212020
January277,327252,761208,253102,54582,3271,682228,434
February279,328240,217218,350107,63996,5073,366207,507
March183,979229,298209,181125,495106,5004,58171,370
April174,608148,867105,49862,9804,1680
May132,919112,12883,30930,2071,4970
June138,241113,470100,38832,8561,6140
July200,244187,810143,03947,2932,4290
August198,235164,609136,40537,7605,0400
September158,971122,140111,93829,80213,5470
October165,193135,907109,19942,02622,7710
November212,906184,158151,49659,75944,2940
December258,928248,592210,35291,96189,506393

Cumulative Q1 2026 arrivals rose 2.5% YoY to 740,634, with resilient regional demand led by India and the United Kingdom.

Primary Deposit & Lending Rates

Period (Year Month)AWDRAWPR
Mar 2026—9.28
Feb 20266.839.35
Jan 20266.818.88
Dec 20256.789.07
Nov 20256.778.64
Oct 20256.798.31
Sep 20256.808.10
Aug 20256.827.97
Jul 20256.888.07
Jun 20256.938.11
May 20256.988.35
Apr 20257.088.36

CCPI Year on Year (%)

Month (Year Month)HeadlineFoodNon Food
Mar 20262.200.702.90
Feb 20261.600.202.30
Jan 20262.303.301.80
Dec 20252.103.001.80
Nov 20252.103.001.70
Oct 20252.103.501.40
Sep 20251.502.900.70
Aug 20251.202.000.80
Jul 2025-0.301.50-1.20
Jun 2025-0.604.30-2.80
May 2025-0.705.20-3.30
Apr 2025-2.001.30-3.60
Mar 2025-2.600.60-4.10

External Sector

Values are in USD million.

Month (Year Month)Official ReservesWorkers' RemittancesEarnings from Tourism
Feb 20267,270.00729.00352.00
Jan 20266,832.00751.10378.30
Dec 20256,825.00879.10308.60
Nov 20256,034.00673.40251.60
Oct 20256,216.00712.00186.10
Sep 20256,244.00695.70182.90
Aug 20256,178.00680.80258.90
Jul 20256,147.00697.30318.50
Jun 20256,081.00635.70169.50
May 20256,286.00641.70164.10
Apr 20256,327.00646.10256.70
Mar 20256,531.00693.30354.00
Feb 20256,086.00548.10367.60
Month (Year Month)ExportsImportsFuel ImportsImport (Non Fuel)
Feb 20261,057.801,833.80398.001,435.80
Jan 20261,148.701,803.30253.501,549.80
Dec 20251,158.002,155.20390.101,765.10
Nov 20251,047.801,778.50333.301,445.20
Oct 20251,149.402,156.80357.801,799.00
Sep 20251,138.502,048.60440.701,607.90
Aug 20251,282.301,696.50255.201,441.30
Jul 20251,302.201,882.20269.701,612.50
Jun 20251,141.801,682.10331.501,350.60
May 20251,034.701,507.20252.801,254.40
Apr 2025968.401,685.90354.701,331.20
Mar 20251,241.701,637.30360.701,276.60

This briefing is prepared by SRP Research for general information only and does not constitute financial, investment, or tax advice. Figures are reproduced from the SRP International Financial & Economic Analysis for March 2026 (external-sector figures to February 2026) and are subject to revision.

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