AGP Executive Report

Monetary Tightening Hits the Headlines: Sri Lanka’s central bank surprised markets with a 100-basis-point rate hike to 8.75%, blaming Middle East-driven energy shocks, higher oil costs, and a weaker rupee as inflation climbs. Tourism Gets a Boost: From May 25, Sri Lanka rolled out free 30-day ETA tourist visas for nationals of 40 countries (including India, UAE, Pakistan and Bahrain), with double-entry allowed within the 30-day validity—just apply online before you fly. Road Safety Crackdown: At Nugegoda, authorities tested 172 bus drivers and conductors; five were found using dangerous drugs, and more islandwide checks are planned. Travel Comfort & Connectivity: SLT-Mobitel launched Sri Lanka’s first TRCSL-approved pocket 5G mobile router, aiming to make on-the-go connectivity easier for travellers. Culture Meets Sport: Sri Lanka is listed among 60+ countries expected at India’s inaugural World Yogasana Championship (June 4–8, Ahmedabad), as Yogasana pushes for global recognition.

Central Bank Shock: Sri Lanka’s Central Bank has lifted the Overnight Policy Rate by a full 100 bps to 8.75%, the biggest jump in years, as Middle East-driven oil costs push inflation higher and pressure the rupee. Tourism Visa Boost: From May 25, Sri Lanka launched free 30-day tourist ETAs for travellers from 40 countries (including India and Bahrain), with double-entry allowed within the 30-day validity—still requiring an ETA registration before boarding. Travel Convenience Moves: SLT-Mobitel rolled out the country’s first TRCSL-approved pocket 5G mobile router, while Asia Asset Finance is offering free PickMe rides for FD customers to and from branches. On the Ground Disruptions: Railway station phone lines were cut nationwide over unpaid bills, leaving passengers without key travel info. Local Economy Signals: Lanka Ashok Leyland reported strong FY26 results and declared a 300% dividend, pointing to pockets of resilience despite the wider squeeze.

Visa Boost for Tourists: Sri Lanka has launched a free Electronic Travel Authorisation (ETA) for visitors from 40 countries, starting May 25—including India, UAE and Pakistan—with a 30-day stay and double-entry allowed within that period. Still Required: Even with the fee waiver, travellers must apply for the ETA before arrival; any ETA fees paid before May 25 are not refundable. On-Arrival Visa Update: Eligible tourists get the free 30-day visa through the ETA system, while Maldivians continue to receive a 90-day tourist visa under reciprocal terms. Rail Disruption: In a separate headache for travellers, railway station phone lines were cut nationwide due to unpaid bills, leaving passengers without timetable info. Fuel Pressure: Sri Lanka is also negotiating to buy Russian and Chinese fuel to ease shortages tied to the Iran war, using a temporary US sanctions waiver until June 17.

Tourism Boost: Sri Lanka has started offering a free 30-day tourist Electronic Travel Authorization (ETA) for nationals of 40 countries, with double-entry allowed within the 30-day validity period—starting May 25, 2026. Travel Rules Reminder: Even with the visa fee waiver, travellers must still get ETA approval before arrival (including for Maldives, Seychelles and Singapore under reciprocal arrangements). Diplomacy & Markets: Foreign Minister Vijitha Herath is set to visit Australia and New Zealand from 26 May to 3 June, with key meetings and the ceremonial opening of the Sri Lanka High Commission in Wellington. Rail Disruption: In a separate headache for travellers, Sri Lanka Railways disconnected public telephone lines at all stations due to unpaid bills, leaving passengers without timetable and info support. Health Watch: A separate report flags global concern over an Ebola outbreak in parts of Central/East Africa, with Sri Lanka’s health expert warning the true scale could be larger than confirmed figures.

FX Pressure Returns: Sri Lanka’s dollar strain is back in focus as vehicle imports restart—boosting customs revenue while immediately draining foreign exchange with no matching inflow, and worsening under global shocks and Middle East oil jitters. Diplomatic Push: Foreign Minister Vijitha Herath heads to Australia and New Zealand from May 26 to June 3, meeting counterparts Winston Peters and Penny Wong, engaging business and the diaspora, and inaugurating Sri Lanka’s High Commission in Wellington. Travel Watch: Dubai is gearing up for Eid with 40+ airlines and heavy demand—plan schedules, fares, and refunds early. Tourism Demand Signals: Sri Lanka welcomed 75,465 tourists in the first 17 days of May, led by India (42% share), with China and Australia also rising. Eastern Land & Coast: President Dissanayake orders a special committee to stop Eastern Province land grabs and calls for scientific solutions to coastal erosion while protecting tourism operations. Safety/Justice: The US Embassy denies claims of an FBI team arriving for a Sri Lanka cyber probe, urging responsible reporting.

Diplomatic Push: Foreign Affairs, Foreign Employment and Tourism Minister Vijitha Herath will travel to Australia and New Zealand from 26 May to 3 June, holding talks with Winston Peters and Penny Wong and meeting business, academics and the Sri Lankan community; a key moment is the ceremonial opening of the Sri Lanka High Commission in Wellington. Eid Travel Crunch: Dubai is bracing for peak Eid demand with 40+ airlines still operating, so travellers are urged to double-check flight schedules, fares and refunds. US Embassy Denial: The US Embassy in Colombo says reports of an FBI team arriving for a cyber probe are false, clarifying it only hosts a routine FBI Legal Attaché office. Tourism Under Pressure: Sri Lanka’s tourism is facing a tougher test as the US–Iran conflict disrupts global travel, with Gulf-linked routes and bookings hit. Eastern Province Focus: President Dissanayake orders a special committee to curb Eastern land grabs, while pushing a long-term plan to tackle coastal erosion and protect tourism areas.

Eastern Land Crackdown: President Anura Kumara Dissanayake ordered a Special Committee (headed by a Deputy Inspector General of Police) to stop illegal land grabs in Sri Lanka’s Eastern Province, after reports of political misuse, unauthorised reclamation and unequal treatment around coastal hotel operations. He also pushed for urgent scientific studies to tackle Eastern coastal erosion, saying rocks and barriers won’t be a long-term fix, and flagged links to Oluvil Harbour and fisheries. Tourism Pressure: With the US–Iran conflict still shaking global travel, Sri Lanka’s tourism momentum is under strain, with arrivals growth slowing and cancellations rising as travellers avoid uncertainty and higher costs. Foreign Employment Scam Court Move: A court ordered Rainbow Manpower’s owner to repay foreign employment scam victims within one year, as the case continues after long remand custody. IMF & Rupee Watch: The rupee’s renewed slide is keeping attention on IMF-led reforms and external pressures ahead of the next IMF review.

Foreign Employment Crackdown: A Sri Lankan court has ordered Rainbow Manpower’s owner to repay foreign-employment scam victims within a year, after he was kept in remand since Oct 31, 2025, with the Foreign Employment Bureau pushing for compensation after years of delays. Rupee Pressure & IMF Watch: The rupee is again sliding fast toward the Rs. 354–380+ zone, with fresh anxiety ahead of an IMF review—temporary loan inflows may ease liquidity, but won’t fix long-term FX earnings. Tourism Test: Sri Lanka’s tourism momentum is wobbling as the US–Iran conflict rattles global travel, while India remains the biggest source market—nearly half of May arrivals. Travel Market Signals: Thailand’s end to 60-day visa-free entry for many countries could redirect some travellers toward Asia routes that still feel easier to plan. Sports & Leisure: Cricket fans get match-day fixtures in Wales, while Sri Lanka’s series spotlight also pops up in Jamaica ahead of the ODI/T20 run.

Tourism Push, But With a Warning: Sri Lanka is being urged to move beyond chasing sheer visitor numbers and build a high-value, experience-led tourism brand—experts say investors now look for policy stability, safety, infrastructure and storytelling, not just arrivals. Rupee Pressure: The rupee is sliding again, with talk of a possible Rs. 380+ range unless urgent steps are taken—bad news for travel costs and everyday spending. Safety & Scams: As crackdowns in hotspot countries push cybercrime networks toward Sri Lanka, police say 1,000+ foreigners have been arrested this year, adding a fresh layer of traveler caution. Regional Signals: Thailand has ended its 60-day visa-free entry for many countries (including India), while India’s UPI is set to go live in Cyprus next year—both reminders that travel rules and payments are shifting fast. On-the-ground Travel Content: A Sri Lanka fam trip with agents (with cooking, tea and safari styles) is getting strong sellable feedback, and Yala is being pitched as an all-inclusive luxury safari alternative.

Tourism Strategy Shift: Global tourism leaders are urging Sri Lanka to drop a mass-market push and build a high-value, experience-led model instead—more stays, more spend, more community connection. Rupee Pressure: The dollar is squeezing again, with the rupee sliding to around Rs. 354 and fears of Rs. 380+ if fixes don’t land fast; IMF/World Bank/ADB inflows may ease liquidity, but loans won’t fully stabilise the currency. Scam Crackdown Spillover: As crackdowns tighten elsewhere, scam operations are reportedly relocating to Sri Lanka, with police saying arrests of foreign cybercrime suspects have surged. Global Attention on Detention: Sri Lanka says it’s distressed by Israeli footage of “Global Sumud Flotilla” detainees and is seeking consular access and safety guarantees for Sri Lankan medic Sameera Mehboobdeen, reported safe after deportation. Investment & Execution Worries: Port City Colombo’s slow policy rollout is still testing investor confidence, even as Sri Lanka markets itself as open for investment. Tea Under Strain: Middle East conflict pressures are hitting tea workers and exports, adding to the cost-of-living squeeze.

Cost-of-Living Pressure: Imported milk powder is set to cost more, and milk tea prices are rising by Rs. 5 as the rupee keeps sliding—then more shocks are flagged for essentials like sugar, dhal and rice. Sugar Supply Shock: India has banned sugar exports until 30 Sept 2026, raising fears of higher Sri Lankan prices and possible shortages. Easter Sunday Court Drama: In Colombo Fort Magistrate’s Court, prosecutors made new claims linking political figures and intelligence officials to the 2019 attacks, including allegations of prison visits and coordination—while defence voices push back. Tourism & Travel Signals: Sri Lanka welcomed its first luxury cruise call with Mein Schiff 6 to Colombo, and visa-relaxation is also drawing attention to scam centres moving in. Healthcare Expansion: Vida Medical Clinic and Medihelp both opened larger facilities, adding services across Colombo’s suburbs. Tea Under Strain: Middle East conflict pressures are hitting tea workers and exports, with costs and energy stress worsening day-to-day life.

Vehicle Import Shock: President Anura Kumara Dissanayake ordered a 50% surcharge on certain vehicle imports (passenger cars, 10+ seater vehicles, and goods transport), while two- and three-wheelers are exempt—sparking fresh questions after reports of possible “front running” ahead of the move. Rupee Pressure & IMF Talks: With the rupee sliding fast, the government is pushing to cut fuel use and import costs and is discussing rupee depreciation with the IMF as dollar inflows from tourism, exports and remittances soften. Tea Under Strain: The Middle East conflict is hitting Ceylon tea workers and exporters hard, with energy costs rising and nearly half of exports tied to the region. Tourism Boost, But Fragile: A luxury cruise ship, Mein Schiff 6, made its maiden Sri Lanka call in Colombo with 2,380 tourists onboard, while arrivals remain sensitive to global shocks. Easter Attacks Court Drama: In the Easter Sunday case, prosecutors alleged links to key political figures and intelligence chief Suresh Sallay, with claims of a mastermind role and overseas statement-taking.

Easter Attacks Court Clash: Sri Lanka’s Fort Magistrate’s Court heard explosive claims that former leaders Mahinda, Basil and Namal Rajapaksa visited Batticaloa prison to meet Pillayan, with prosecutors alleging the meeting included promises of bail within a week after Gotabaya Rajapaksa took office, while AG-linked allegations also name SIS figure Suresh Sallay as a key mastermind and contractor. Political Pushback: Namal Rajapaksa insists his prison visit was “no secret,” pointing to prison records and questioning why CID reportedly travelled to France if the goal was only to confirm his meeting. Tourism Watch: May arrivals improved after a Middle East-linked dip, with Sri Lanka welcoming 951,742 tourists by May 17, but officials warn the industry can’t rely on international volume alone—quality and the domestic market matter more than ever. Travel Safety & Rules: UK health bodies flag rising travel diseases (including measles and dengue), while Thailand tightens visa-free stays for 93 countries, affecting some British travellers. Money & Markets: CBSL expects multilateral inflows to ease rupee pressure as oil costs and external stress build.

Tourism Push (Quality over Numbers): Sri Lanka’s PM Harini Amarasuriya urged the industry to stop chasing visitor volume and instead build high-quality, sustainable local experiences—especially as April arrivals hit a 2026 low, down over 22% year-on-year to 135,643 amid Middle East-linked flight disruption. Tourism Numbers: SLTDA says 951,742 tourists have arrived by May 17, with Indians leading (221,953), followed by the UK, Russia, Germany and China. Health Alert: Health experts gave mixed signals on Ebola risk—no immediate danger, but stronger airport screening and prompt testing for travellers returning from Africa were urged. FX Pressure: CBSL says rupee volatility is being managed, expecting about $1bn in multilateral inflows (IMF/ADB/World Bank) to ease pressure from higher oil imports and Middle East uncertainty. Digital Diplomacy: Foreign Affairs launched a revamped website and a unified platform bringing seven overseas missions online under one system. Travel Reality Check: A separate report warns that cheaper stopover flights via Middle East hubs may leave travellers uncovered if they transit through areas under travel advisories.

Cricket & Travel Buzz: India’s BCCI has named 15-year-old IPL star Vaibhav Sooryavanshi in the India A squad for a one-day tri-series in Sri Lanka in June, with selectors saying the goal is to give young talent the right exposure. Central Bank Watch: CBSL moved to calm nerves over rupee volatility, pointing to expected multilateral inflows (IMF/ADB/World Bank) and warning that speculators are adding uncertainty. Digital Diplomacy: Sri Lanka’s Foreign Affairs Ministry launched a revamped website plus a unified Common Website Platform for overseas missions, bringing seven missions online under Phase I. Disaster Relief Tech: For Cyclone Ditwah victims, a new digital Compensation Management System and Community Inquiry Mechanism went live to speed up claims via Grama Niladhari officers. Transport Update: Sri Lanka Railways is assessing damage after the Wanawasala derailment and says repairs are done, with compensation steps underway for injured passengers.

Forced Labour Crackdown: A three-day inter-agency workshop began at the National Plantation Management Institute in Athurugiriya, bringing Labour, Police, and the Foreign Affairs/Overseas Employment/Tourism Ministry together to strengthen enforcement across Western and Sabaragamuwa Provinces, with ILO support. Digital Government for Travel & Missions: The Foreign Affairs, Foreign Employment and Tourism Ministry rolled out a revamped ministry website plus a Common Website Platform for Sri Lanka Missions abroad, starting with seven posts, aiming for faster, more transparent public service. Cyclone Ditwah Relief Goes Online: Norway, UNICEF and UN Volunteers backed new digital tools—an online Compensation Management System and a Community Inquiry Mechanism—so affected families can submit claims via Grama Niladhari officers. Bilateral Links: Sri Lanka and Belarus signed an air services agreement and MoUs on higher education and healthcare. Transport Watch: Sri Lanka Railways is assessing damage from the Wanawasala derailment and has started compensation steps for injured passengers.