By: Staff Writer
February 15, Colombo (LNW): The Central Bank of Sri Lanka (CBSL) has signalled a decisive shift in the country’s price trajectory, forecasting a steady rise in inflation toward its 5% target in the second half of 2026. The outlook, contained in its February 2026 Monetary Policy Report, reflects a transition from prolonged deflation to a demand-driven recovery but risks remain significant.
After nearly two years of deflationary pressure, headline inflation returned to positive territory in August 2025. Since then, price growth has gradually accelerated. The bank now expects inflation to stabilise around 5% over the medium term, provided policy settings remain consistent and external shocks are limited.
A major turning point lies in energy and transport costs. These sectors, deeply negative for much of the past two years, are expected to register positive inflation soon. While part of this shift reflects statistical base effects, global fuel price volatility and geopolitical tensions continue to pose threats. Sri Lanka’s heavy reliance on imported energy leaves domestic prices exposed to external shocks.
Core inflation — which strips out volatile food and energy components is also projected to rise gradually. The CBSL attributes this to strengthening domestic demand and imported cost pressures, particularly linked to global food markets. Corporate sector inflation expectations have risen in recent months, broadly aligning with actual inflation trends. Short-term and medium-term expectations are converging toward the 5% target, suggesting that inflation psychology may be stabilising.
Food prices, however, remain a major wildcard. The recent Cyclone Ditwah disrupted agricultural output, creating near-term upward pressure on prices. While restoration and re-cultivation efforts are under way, recurring extreme weather events highlight Sri Lanka’s vulnerability to climate-related shocks. Food inflation is expected to remain elevated in the short run, underscoring structural weaknesses in agricultural resilience.
The broader concern is uncertainty. Inflation projections remain sensitive to global geopolitical volatility, commodity prices, and the pace of domestic structural reforms. Any renewed spike in oil prices or external supply chain disruptions could derail price stability.
For policymakers, the challenge is delicate: nurture the recovery without reigniting instability. The CBSL’s message is cautiously optimistic, but it is clear that inflation’s return is not yet a sign of full normalisation. Rather, it marks the beginning of a complex balancing act between recovery and restraint in a still-fragile economy.
Sri Lanka Inflation Rebounds amid Fragile Recovery
Storm-Battered Sri Lanka Banks on India-Pakistan T20 Millions
By: Staff Writer
February 15, Colombo (LNW): As cyclone cleanup crews cleared debris in Sri Lanka’s coastal districts, Colombo’s skyline told a different story sold-out hotels, packed restaurants, and fully booked flights. The India–Pakistan T20 World Cup showdown became an economic counterweight to climate disruption, engineered through high-stakes regional diplomacy.
President Anura Kumara Dissanayake played a central role in facilitating the politically sensitive fixture. For a leader whose political roots lay in Marxist nationalism and skepticism toward India, the mediation marked a visible pivot. Hosting the subcontinent’s fiercest rivalry signaled a recalibrated foreign policy balanced engagement with New Delhi and Beijing, framed through economic pragmatism.
The fiscal arithmetic underscores the strategy.Using conservative assumptions:
• 6,000 Indian visitors
• Average total spend per visitor: $1,900
(Airfare $750; hotel $750; ticket & hospitality $100; food/transport/retail $300)
Visitor expenditure alone: $11.4 million.
Add domestic spectators approximately 20,000 locals spending $40 each contributing $800,000.
Corporate boxes, sponsorship activations, merchandising and local service contracts injected an additional $1-1.5 million.
Total short-term direct activity: roughly $13-14 million.
With a tourism multiplier of 1.5, the broader economic impact likely approached $18- $20 million.
Security and logistical costs, heightened due to both cyclone disruptions and the political sensitivity of the fixture, may have reached several hundred thousand dollars. Even so, the net fiscal position remains strongly positive.
Tax gains were immediate. Increased hotel levies and airport service charges averaging 12-15% generated an estimated $1.7-2.1 million in state revenue, excluding indirect tax flows across supply chains.
Just as crucial was the publicity dividend. India–Pakistan matches routinely draw global audiences exceeding 200 million. Every broadcast frame orderly crowds, operational transport, and restored infrastructureprojected resilience despite recent cyclone damage.
For investors, airlines and tour operators evaluating post-crisis Sri Lanka, such imagery reinforces stability. For the government, it demonstrates that even amid natural disaster recovery and fiscal consolidation, the country can execute complex, high-visibility events.
In effect, Dissanayake transformed cricket into economic statecraft. The stadium became not only sporting theatre but fiscal instrument turning geopolitical tension into measurable revenue.
In cyclone-hit Sri Lanka, the scoreboard told one story. The balance sheet told another.
Overseas Investors Channel Nearly US$30 Million into Sri Lankan Rupee Bonds
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By: Isuru Parakrama
February 15, Colombo (LNW): Foreign appetite for Sri Lankan government securities has strengthened once again, with almost US$30 million flowing into local-currency bonds during the week ending February 12, figures released by the Central Bank of Sri Lanka (CBSL) disclosed.
The latest data indicate that offshore investors purchased a net 9.2 billion rupees’ worth of Treasury instruments over the week — equivalent to roughly US$29.9 million at prevailing exchange rates. This marks the seventeenth week of net foreign buying in the past twenty-four weeks, signalling sustained confidence in the island’s debt market.
Over the most recent three-week period alone, overseas investors have channelled more than 23 billion rupees (approximately US$76–77 million) into rupee-denominated government securities. As a result, total foreign holdings in local bonds have climbed to their highest level in nearly two and a half years, reaching a peak last seen in early September 2023.
Cumulatively, Sri Lanka has recorded a net foreign inflow of nearly 22 billion rupees — about US$71 million — during the first six weeks of 2026. Market participants suggest that this steady influx reflects improving macroeconomic indicators and relative yield attractiveness compared with other frontier and emerging markets.
Globally, investors remain watchful of signals from the Federal Reserve regarding potential interest rate reductions. Historically, expectations of rate cuts in the United States have encouraged capital to seek higher returns in emerging economies. Analysts note that such shifts can redirect funds towards markets like Sri Lanka, particularly when domestic reforms and fiscal consolidation are perceived to be on track.
Sri Lanka experienced total foreign inflows of around 71.5 billion rupees (approximately US$234 million) into rupee bonds during 2025. However, sentiment has not been immune to global volatility. In the wake of tariff announcements by former US President Donald Trump last April, the country saw an outflow of just over 10 billion rupees within a fortnight, accompanied by renewed pressure on the rupee.
Despite episodes of currency depreciation, foreign investors have continued to accumulate local bonds. Analysts attribute this resilience to tight monetary conditions and deflationary policies that have curtailed imports and supported external balances. The Central Bank has maintained its key policy rates unchanged since May last year, following an aggressive easing cycle that delivered cumulative cuts of 825 basis points over two years.
With yields remaining comparatively attractive and external financing conditions gradually stabilising, market observers believe Sri Lanka could continue to draw selective foreign inflows — provided global risk sentiment does not deteriorate sharply.
Judicial Service Commission Orders Annual Reporting on Court-Ordered Drug Destruction
February 15, Colombo (LNW): A new directive has been circulated requiring courts to submit detailed yearly reports on the destruction of narcotics and other hazardous substances carried out under judicial orders.
The circular, issued under the authority of Prasanna Alwis, Secretary of the Judicial Service Commission, instructs relevant judicial officers to forward comprehensive accounts of all such disposals to the National Dangerous Drugs Control Board no later than December 31 each year.
According to the new guidelines, courts must compile and formally transmit annual summaries covering the destruction of poisons, opium and all other categories classified as dangerous drugs. The reports are expected to include quantities destroyed, dates of disposal and confirmation that procedures were conducted in accordance with legal and safety standards.
Officials say the measure is intended to enhance transparency, strengthen regulatory oversight and ensure accurate national record-keeping relating to controlled substances seized through criminal proceedings. It is also seen as a move to reinforce public confidence in the judicial handling of narcotics-related cases.
Legal observers note that systematic documentation of court-ordered destruction will enable the National Dangerous Drugs Control Board to maintain an updated central database, support policy planning and assist in monitoring trends in drug-related offences.
Court registrars and administrative staff have reportedly been advised to ensure meticulous record maintenance throughout the year in order to comply fully with the new reporting requirement.
Nationwide Preparations Complete for GCE Ordinary Level Examination
February 15, Colombo (LNW): Sri Lanka’s education authorities have confirmed that comprehensive arrangements are now in place for the conduct of this year’s GCE Ordinary Level examination, with thousands of candidates set to sit the crucial papers across the island.
Commissioner General of Examinations, Indika Kumari Liyanage, announced that the examination will be held at 3,545 centres nationwide. She noted that logistical coordination has been finalised to ensure the smooth administration of the examination process, which remains one of the most significant milestones in the country’s academic calendar.
Security has been strengthened at all venues in collaboration with the Police and the Tri-Forces to guarantee the safety and well-being of students and staff. Officials have also engaged the Disaster Management Centre to provide contingency support in the event of unforeseen circumstances, including adverse weather conditions or transport disruptions. Special transport arrangements are expected to assist candidates who may face difficulties reaching their designated centres.
In light of document losses caused by Cyclone Ditwah in certain areas, the Commissioner General clarified that temporary identification measures have been introduced. Candidates who have misplaced essential documents such as their National Identity Card may submit two recent passport-sized photographs certified by the relevant authority — the Grama Niladhari for private applicants or the school principal for school candidates — to gain admission to the examination hall.
Meanwhile, the Department of Examinations has provided an update on forthcoming results. The results of the GCE Advanced Level examination are anticipated to be released by April, while the Ordinary Level results are expected within three months of the completion of the examination.
Officials have urged candidates to adhere strictly to examination guidelines and to arrive at their centres well ahead of time, emphasising that all necessary steps have been taken to ensure the process proceeds efficiently and fairly across the country.
Massive Security Operation Rolled Out for India–Pakistan T20 Showdown in Colombo
February 15, Colombo (LNW): An extensive security apparatus involving roughly 5,000 personnel has been activated in Colombo ahead of tonight’s high-stakes 2026 T20 World Cup encounter between India and Pakistan.
Addressing a dedicated media briefing, Senior Deputy Inspector General of Police for the Western Province, Sajeewa Medawatte, confirmed that comprehensive measures are in place to guarantee the smooth and secure conduct of the fixture, which is scheduled to begin at 7.00 p.m.
Heightened protection has been arranged not only at the R. Premadasa International Cricket Stadium but also at the hotels accommodating both national squads. Police patrols have been intensified along key transport routes frequently used by the teams, with escort units deployed to monitor movements and prevent potential disruptions.
According to the senior officer, the operation draws on a broad cross-section of law enforcement resources. Approximately 2,800 police officers have been assigned to ground duties, supported by 300 members of the Special Task Force and a substantial contingent of intelligence personnel tasked with surveillance and threat assessment. In addition, around 350 officers have been detailed specifically to manage traffic flow in and around the city, where heavy congestion is anticipated.
Authorities say the layered security plan includes roadblocks, vehicle inspections and real-time intelligence monitoring. Crowd management units have also been positioned at strategic locations to respond swiftly to any emergency.
Police have urged supporters travelling to the stadium to allow extra time for security screening and to cooperate fully with officers on duty. With tens of thousands of fans expected to attend and millions more watching worldwide, officials stressed that ensuring public safety remains their foremost priority as Colombo hosts one of cricket’s most fiercely contested rivalries.
BASL Convenes Rare Full Assembly in Wake of Lawyer’s Killing
February 15, Colombo (LNW): In an extraordinary show of unity, the entire membership of the Bar Association of Sri Lanka assembled in Colombo today (15) to deliberate on a collective response to the recent killing of a fellow lawyer and his wife in Akuregoda.
The meeting, held at the Association’s headquarters in Hulftsdorp — the historic heart of the country’s legal district — drew an unusually large turnout of attorneys from across the island. Senior and junior members alike gathered to reflect on the implications of the double murder for the independence and security of the legal profession.
This marks the first occasion in fourteen years that the BASL has summoned its full membership for a single assembly in the capital. The previous instance occurred in 2012 amid the constitutional crisis triggered by the parliamentary impeachment of former Chief Justice Shirani Bandaranayake, a moment widely regarded as a watershed for judicial independence in Sri Lanka.
Today’s session is being chaired by BASL President Rajeev Amarasuriya, who is expected to outline a series of proposals ranging from coordinated legal action to public advocacy initiatives aimed at reinforcing the safety of legal practitioners.
NPP Legal Wing Demands Swift Justice After Lawyer and Wife Gunned Down
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By: Isuru Parakrama
February 15, Colombo (LNW): The legal professionals affiliated with the National People’s Power (NPP) have strongly denounced the fatal shooting of attorney-at-law Buddhika Mallawarachchi and his wife in Akuregoda, Thalangama, describing the attack as a grave assault on the rule of law.
In a sharply worded statement released following the killings on February 13, 2026, the group expressed profound sorrow over the loss of their colleague and condemned what they characterised as a climate of violence fuelled by entrenched criminal networks.
They alleged that elements within the underworld had, in previous years, been emboldened by political patronage and allowed to flourish unchecked.
The lawyers said the murder was not merely an attack on an individual practitioner and his spouse, but a chilling message aimed at all those who work to uphold justice and protect civil liberties. They argued that when members of the legal fraternity are targeted, the implications extend far beyond the courtroom, striking at the very foundation of democratic governance.
Calling for decisive action, the group stressed that the present administration carries a clear mandate to dismantle the culture of impunity that once enabled armed gangs to operate without fear of consequence. They warned that unchecked criminality poses a threat to a wide spectrum of society — from journalists and law enforcement officers to members of the judiciary and the Bar.
The statement further asserted that the State must not shirk its responsibility to ensure public safety. According to the lawyers, investigative bodies and preventive institutions must respond with greater urgency and coordination, demonstrating that justice will neither be delayed nor denied.
They urged the Government to reaffirm its commitment to safeguarding citizens’ rights and appealed to the police to expedite inquiries, identify all those responsible and ensure that prosecutions proceed without interference.
The killing has reignited debate within legal and civic circles about personal security, the resilience of institutions and the broader challenge of confronting organised crime in Sri Lanka.
Full Statement:
“We are deeply saddened by the death of our comrade Buddhika Mallawarachchi and his wife. This cruel and inhuman attack targets not only a lawyer and his spouse but also the citizens of this country at large.
The incident underscores that the current government, tasked with ending the era in which armed criminals could operate with impunity, must act with greater urgency. The threat posed by bloodthirsty criminals is not limited to any single profession, it could target journalists, police officers, judges, and now, as seen, lawyers.
The state cannot evade its responsibility. All components of the justice system, including preventive mechanisms and ongoing investigations, must operate faster than ever.
We urge the National People’s Power government to uphold its duty to ensure the safety and dignity of all citizens and call on the Sri Lanka Police to promptly complete the investigation and bring the perpetrators to justice.”
Public Mood Brightens as Confidence in Government and Economy Reaches Four-Year High
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By: Isuru Parakrama
February 15, Colombo (LNW): Sri Lankans appear to be increasingly hopeful about the country’s trajectory, with fresh survey findings indicating solid backing for the Government and a marked uplift in economic sentiment.
The latest nationwide “Mood of the Nation” study conducted by Verité Research, in collaboration with Vanguard Survey (Pvt) Ltd, shows that public approval of the administration has climbed to 65 per cent as of early February 2026.
Given the poll’s margin of error of plus or minus three percentage points, this represents a steady yet meaningful rise from the 62 per cent recorded at the same point last year. Levels of disapproval, meanwhile, remain comparatively low and broadly unchanged.
In a notable shift, respondents expressing positive views of current economic conditions now outnumber those who consider them poor — the first time such a crossover has occurred since the survey began four years ago. This development is being interpreted by analysts as a sign that perceptions of economic stabilisation are taking firmer root among the public.
Expectations for the future also appear to be strengthening. Nearly two-thirds of those surveyed — 64 per cent — believe the economy is on an upward path, compared with 55 per cent a year earlier. The proportion of participants who feel conditions are deteriorating has seen little movement, while the number of undecided respondents has fallen, suggesting that more citizens have formed clear and increasingly optimistic opinions.
These responses feed into an Economic Confidence Index compiled by the research team, measured on a scale from minus 100 to plus 100. The index has surged to +36, a substantial leap from +14 twelve months ago and its highest reading since the tracking exercise commenced.
General satisfaction with the state of the nation has also edged into majority territory. For the first time in the poll’s history, 59 per cent of respondents indicated that they were content with the overall direction in which the country is heading, pushing aggregate satisfaction beyond the halfway mark.
When asked to compare the present administration’s performance with that of previous governments, participants awarded particularly strong marks for initiatives aimed at tackling narcotics and curbing crime. Interestingly, these efforts were rated even more favourably than anti-corruption measures, traditionally a dominant public concern.
The “Mood of the Nation” survey forms part of Verité Research’s broader syndicated polling initiative, designed to inform macro-political analysis and provide insight into public opinion trends. The platform also enables external organisations to commission additional questions for inclusion in the national sample.
The most recent wave of the survey was conducted between 24 January and 3 February 2026, drawing on a nationally representative, multi-stage random sample of 1,048 adults from separate households across Sri Lanka. Researchers estimate a maximum sampling error of ±3 percentage points at a 95 per cent confidence level, while noting that minor implementation variances may marginally influence results.
Burnt-Out Vehicle in Galle Linked to Akuregoda Double Murder
February 15, Colombo (LNW): Police have uncovered a charred vehicle in the southern district of Galle which is believed to have been used in the fatal shooting of a lawyer and his wife earlier this week in Akuregoda, Thalangama.
Officers attached to the Nugegoda Divisional Crimes Investigation Bureau said the car was located along a narrow access road in the Kuttiyawatta area of Agaliya. By the time authorities reached the scene, the vehicle had already been set ablaze and was burning fiercely, suggesting an attempt to destroy crucial evidence.
Investigators had received a tip-off that the car connected to the killing of attorney-at-law Buddhika Mallawarachchi and his spouse had been abandoned in the area. Acting swiftly on the information, police cordoned off the surroundings while firefighters battled the flames. Forensic teams later sifted through the wreckage in search of material that could assist the inquiry.
The double homicide, which occurred in broad daylight in a residential neighbourhood, has sent shockwaves through the legal community and heightened concerns over organised criminal activity. Authorities now suspect the attack may have been orchestrated by an alleged underworld figure operating from overseas, identified as Jayalath Silva alias ‘Karandeniya Sudda.’
Sources indicate that the slain lawyer had previously represented Silva in court. More recently, however, he is understood to have appeared on behalf of a rival criminal leader known as Loku Pati. Detectives are exploring the possibility that the killings were motivated by suspicions that sensitive information had been passed between opposing factions.
Senior officers have neither confirmed arrests nor ruled out further suspects, but they maintain that several leads are being actively pursued. Security has also been tightened in parts of Colombo and its suburbs as a precautionary measure.
The Nugegoda Divisional Crimes Investigation Bureau continues to lead the probe, with assistance from forensic specialists and intelligence units. Police have appealed to members of the public who may have witnessed suspicious movements in the Agaliya area to come forward with information, assuring that all tips will be treated in strict confidence.