Sri Lanka’s foreign debt has increased by Rs. 703 billion over the past 15 months due to the depreciation of the rupee against the US dollar, according to the Sri Lanka Human Rights Centre.
Sri Lanka Human Rights Centre Executive Director Rajith Keerthi Tennakoon said the exchange rate of the US dollar, which stood at Rs. 293 in October 2024, has risen to Rs. 312—an increase of Rs. 19. He explained that this depreciation has added Rs. 703 billion to the country’s foreign debt, which stood at approximately US$ 37 billion by mid-2025.
“The additional burden is calculated by multiplying the total foreign debt of US$ 37 billion by the Rs. 19 depreciation of the rupee,” Tennakoon said.
In a statement, the Human Rights Centre pointed out that this loss alone exceeds the financial assistance of about US$ 206 million Sri Lanka received under the International Monetary Fund’s Rapid Financing Instrument. It noted that when converted at the current exchange rate of Rs. 312 per dollar, the IMF assistance amounts to less than the loss incurred due to currency depreciation.
The Centre further explained that for every one-rupee depreciation against the US dollar, Sri Lanka’s external debt burden increases by approximately Rs. 37 billion.
Referring to past trends, Tennakoon said that in 2022, amid economic collapse and sharp currency depreciation, the dollar rose to Rs. 361 according to Central Bank rates, while commercial bank rates exceeded Rs. 400. He noted that the dollar later strengthened to Rs. 293 due to economic management by the previous government, but the rupee has been depreciating rapidly again in recent months.
He attributed the growing foreign debt burden to economic mismanagement and the failure to attract foreign direct investment, warning that the additional cost—estimated at around Rs. 700 billion—would ultimately be borne by the public through increased direct and indirect taxation.
The Sri Lanka Human Rights Centre also stated that the country’s foreign reserves have declined by US$ 498 million over an eight-month period, falling from US$ 6,531 million in March 2025 to US$ 6,033 million in November 2025.
