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Sri Lankan Rupee becomes best performing Asian currency

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In remarkable turnaround of events for the Sri Lankan rupee, respected financial news agency Bloomberg said the currency has surged against the dollar, snapping a nine-day losing streak to become Asia’s best-performing currency on Friday.

Bloomberg reported that the rupee strengthened as much as 2.7%, its biggest gain since March 2023, reversing losses from Thursday when it slid to a three-year low.

Data from the Central Bank of Sri Lanka (CBSL) show the extent of the panic that gripped Sri Lanka’s foreign exchange market last week, with the rupee’s year-to-date (YTD) depreciation against the US dollar accelerating sharply within days as importers rushed to secure dollars while exporters delayed conversions.

According to CBSL Weekly Economic Indicators data, the rupee’s YTD depreciation stood at 4.5% by 15 May before surging to 7.2% by 22 May, marking the sharpest deterioration in the currency so far this year.

The movement came amid heightened market anxiety over the economic fallout from the Middle East conflict and fears of rising global energy prices.

The rupee appreciated on Friday after the CBSL moved to calm a nervous foreign exchange market following sharp depreciation earlier in the week.

Economy

Sri Lanka’s first passenger drone arrives ahead of maiden flight

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Sri Lanka’s first passenger transport drone has arrived in the country, with its maiden flight scheduled to take place at Colombo Port City by the end of October, the Civil Aviation Authority of Sri Lanka (CAASL) has announced.

The drone can carry two passengers and has a flight duration of approximately 30 minutes.

Sri Lanka became the first country to adopt the Global Fast Track Programme launched by Chinese technology company EHang to accelerate the introduction of pilotless electric vertical take-off and landing (eVTOL) aircraft in international markets.

Colombo Port City has been designated as the initial operational zone for the project, which aims to introduce passenger transport services using the aircraft, subject to the necessary regulatory and safety approvals.

Potential routes under consideration include scenic flights over Sigiriya and Pidurangala, as well as passenger transfers between Bandaranaike International Airport in Katunayake and hotels in Colombo.

The initiative is also expected to explore other applications, including tourism and maritime logistics.

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Economy

Sri Lankan scientist helps uncover oldest fast radio burst from 10 billion years ago

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Sri Lankan scientist Themiya Nanayakkara has been part of an international team of researchers that discovered the oldest fast radio burst ever recorded, originating from a galaxy approximately 10 billion years ago.

The groundbreaking discovery, published in the scientific journal Science, could help astronomers better understand the evolution of the universe and the vast network of matter known as the cosmic web.

The research team, led by University of Sydney astrophysicist Dr. Manisha Caleb, included Nanayakkara, who was identified as a co-author of the study.

The mysterious burst, named FRB 20240304B, was first recorded in 2024 by the MeerKAT radio telescope in South Africa.

Scientists subsequently used NASA’s James Webb Space Telescope to trace the signal to a small, actively star-forming galaxy that existed just three billion years after the Big Bang.

Fast radio bursts are extremely powerful flashes of radio waves lasting only a few milliseconds. Despite their brief duration, they can release as much energy as the Sun produces over several days.

Researchers believe these bursts may originate from highly magnetized neutron stars known as magnetars, although their precise origins remain uncertain.

Speaking to Australia’s ABC News, Dr. Caleb described the discovery as extraordinary, noting that the signal began its journey billions of years before the Sun and solar system existed.

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Economy

Sri Lanka aims to reduce VAT rates within next 2–3 years

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President Anura Kumara Dissanayake says the government aims to reduce Value Added Tax (VAT) rates over the next two to three years as part of efforts to provide financial relief to the public.

Speaking at a ceremony to present appointment letters to 1,540 new Grama Niladhari officers at Temple Trees on Thursday (Oct. 8), the President said the government was working towards reducing the tax burden on citizens while managing rising public expenditure.

“Our objective is to provide relief to the people by reducing Value Added Tax (VAT) rates over the next two to three years,” he said.

The President also stressed the need to remove taxes on essential educational materials, saying children should not have to bear a tax burden when purchasing books.

“If a child has to pay a tax when purchasing a book to read, we should remove that tax,” he said.

However, the President acknowledged that reducing taxes would require careful management of government expenditure, particularly as the administration implements salary increases for public sector employees.

He said the government’s decision to increase public sector basic salaries in three stages would result in an additional expenditure of Rs. 330 billion by 2027.

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