Public debt tops Rs. 32.98 t in 2Q despite fall in dollar terms

• Gross public debt rises Rs. 744 b in 2Q, while dollar value falls $ 4.32 b
• Government debt increases Rs. 806 b to nearly Rs. 32 t; domestic debt eases Rs. 180 b
• External debt rises $ 540 m to $ 38.01 b, led by multilateral and bilateral borrowing
• IMF exposure jumps $ 687 m; SOE guaranteed debt falls 12% to $ 2.89 b

Sri Lanka’s gross public debt increased by Rs. 744 billion during the second quarter of 2026 to Rs. 32.98 trillion, even as its dollar value declined by $ 4.32 billion to $ 97.95 billion, according to the latest Public Debt Management Office (PDMO) data.

The PDMO’s Statistical Debt Bulletin for the second quarter showed gross public debt rising 2.3% from Rs.32.23 trillion at end-March to Rs. 32.98 trillion at end-June. In dollar terms, however, the stock declined 4.2% from $ 102.27 billion to $ 97.95 billion.

The PDMO converts debt denominated in different currencies using respective quarter-end exchange rates. The indicative exchange rate used for end-June was Rs.336.6623 per dollar, compared with Rs.315.1909 at end-March.

The second-quarter increase followed a marginal Rs. 38 billion rise in gross public debt during the first quarter, from Rs. 32.20 trillion at end-2025 to Rs.32.23 trillion at end-March. In dollar terms, debt had declined from $ 103.86 billion to $ 102.27 billion during 1Q before falling further to $ 97.95 billion in 2Q.

Central Government debt increased by Rs. 806 billion, or 2.6%, during 2Q to Rs. 32 trillion from Rs. 31.19 trillion at end-March. Its dollar value declined by $ 3.92 billion, or 4%, to $ 95.05 billion from $ 98.97 billion.

The two major components moved in opposite directions.

Domestic Government debt declined by Rs. 180 billion, or 0.9%, to Rs. 19.20 trillion from Rs. 19.38 trillion. Its dollar equivalent fell 7.2% to $ 57.04 billion from $ 61.50 billion.

Within domestic debt, rupee-denominated obligations declined by Rs. 227 billion to Rs. 18.46 trillion, while foreign currency-denominated domestic debt increased by Rs. 47 billion to Rs. 741 billion.

A shift was also evident within the Government securities portfolio. Outstanding Treasury Bills declined by Rs. 480 billion to Rs.2.37 trillion at end-June from Rs. 2.85 trillion at end-March, while Treasury Bonds increased by Rs. 254 billion to Rs. 16.07 trillion from Rs. 15.82 trillion.

External Government debt, meanwhile, increased by $ 540 million, or 1.4%, to $ 38.01 billion during 2Q from $ 37.47 billion at end-March. In rupee terms, the stock increased by Rs. 986 billion, or 8.3%, to Rs. 12.80 trillion from Rs. 11.81 trillion. The PDMO specifically reported the $ 540 million nominal quarter-on-quarter increase.

Multilateral debt increased by $ 620 million to $ 14.80 billion from $ 14.18 billion, while bilateral debt rose by $ 312 million to $ 10.80 billion from $ 10.49 billion. Market borrowings declined by $ 392 million to $ 12.41 billion from $ 12.80 billion. Multilateral, commercial and bilateral debt accounted for 38%, 34% and 28%, respectively, of Government external debt at end-June.

The increase in multilateral debt was led by the International Monetary Fund (IMF), with outstanding exposure rising by $ 686.6 million to $ 2.62 billion from $ 1.93 billion at end-March. Asian Development Bank debt declined by $ 68.9 million to $ 6.89 billion, while World Bank exposure was virtually unchanged at $ 4.67 billion.

Among bilateral creditors, Korea recorded one of the largest increases, with outstanding debt rising to $ 514.3 million from $ 264.9 million. Kuwait exposure increased to $ 183.5 million from $ 94.8 million, while China edged up to $ 5.01 billion from $ 4.99 billion.

Debt to Japan declined to $ 2.27 billion from $ 2.31 billion, while India eased to $ 853.9 million from $ 856.1 million.

Commercial external debt declined to $ 12.41 billion from $ 12.80 billion. Outstanding International Sovereign Bonds fell by $ 374.5 million to $ 10.01 billion, while China Development Bank term-loan facilities declined to $ 2.40 billion from $ 2.42 billion.

Government-guaranteed SOE debt also declined during 2Q, falling by $ 394 million, or 12%, to $ 2.89 billion from $ 3.28 billion. In rupee terms, guaranteed SOE debt declined by Rs.62 billion to Rs.971 billion from Rs.1.03 trillion.

The PDMO said regular debt servicing has resumed to creditor partners where restructuring agreements have been concluded. However, restructuring with creditors from 13 countries remained ongoing at end-June, with debt advisers, the Finance Ministry and respective creditors continuing discussions to finalise arrangements.