Finance and Planning Deputy Minister Dr. Anil Jayantha Fernando says Sri Lanka is expected to receive approximately US$ 700 million from the International Monetary Fund (IMF) by the end of May under the combined fifth and sixth reviews of the Extended Fund Facility (EFF) programme.
Speaking in Parliament yesterday, the Deputy Minister stated that the inflow would help the country manage its trade balance more favourably amid ongoing global economic challenges.
He also noted that the Asian Development Bank (ADB) has increased its planned 2026 budget support to Sri Lanka to US$ 480 million, including an additional US$ 100 million aimed at mitigating global economic headwinds.
“Simultaneously, the World Bank Group and its affiliated institutions are providing a combined US$ 200 million through specific development and structural reform operations,” he said.
Addressing the recent depreciation of the rupee, Dr. Fernando stated that the decline was largely driven by the strengthening US dollar and rising global oil prices linked to Middle East tensions.
However, he noted that Central Bank data shows the rupee’s depreciation remains moderate compared to several regional currencies.
He emphasized that Sri Lanka continues to follow a flexible exchange rate policy, allowing the rupee to adjust according to market forces.
“When the currency depreciates, domestic goods become cheaper for foreign buyers, boosting exports, while imports become more expensive for locals, helping curb import expenditure and correct trade imbalances,” he explained.
According to the Deputy Minister, managing the trade deficit will continue to depend on fiscal reforms, exchange rate flexibility, and rebuilding official reserves under the broader macroeconomic recovery programme.
Dr. Fernando also outlined several relief measures introduced by the government to reduce the impact of rising global energy costs and regional instability without resorting to new borrowing or money printing.
These measures include a Rs. 60 billion allocation for fuel subsidies, offering concessions of up to Rs. 100 per litre for diesel and Rs. 20 per litre for petrol.
An additional Rs. 15 billion has been allocated for electricity subsidies targeting domestic consumers using less than 180 units.
He further stated that monthly fuel allowances will be provided to the fishing community, including Rs. 31,250 for standard fishing boats and Rs. 150,000 for multi-day vessels, along with direct per-litre fuel subsidies.
The government has also capped fertiliser prices for paddy cultivation at Rs. 10,200 per bag while increasing subsidy payments for paddy farmers up to Rs. 30,000 and for other crops up to Rs. 18,000.
In addition, benefits under the “Aswesuma” welfare programme have been increased, with the Rs. 17,500 allowance raised to Rs. 25,000.
The Deputy Minister added that the government will continue implementing the QR code-based fuel distribution system in order to manage and reduce national fuel consumption amid continuing Middle East tensions.
He also noted that Sri Lanka has imposed a temporary 50 percent surcharge on Customs Import Duties for most personal vehicles for a three-month period beginning May 16, 2026, as part of efforts to manage the trade balance, protect foreign exchange reserves, and ease pressure on the rupee.
According to Dr. Fernando, the surcharge increases the standard 30 percent Customs Import Duty to 45 percent of the CIF value, rather than directly adding 15 percent to the total vehicle cost.
Vehicles for which Letters of Credit (LCs) were opened on or before May 15, 2026, are exempt from the surcharge, and he warned that any violations of the regulation would constitute an offence.
The Deputy Minister further stated that although the Sri Lankan rupee had depreciated by around 4.8 percent against the US dollar, the decline remains relatively lower compared to other regional currencies facing similar external pressures.
He described the currency depreciation as part of a broader regional trend driven by global shocks, particularly rising energy prices and a stronger US dollar.