Sri Lanka stuns with 100-bp rate hike as Iran war rattles currency, fuels inflation

By Uditha Jayasinghe

COLOMBO, May 26 (Reuters) - Sri Lanka's central bank stunned markets by raising its policy rate by an outsized 100 basis points on Tuesday, the biggest hike in three years, and signalled more tightening as surging energy costs whip up inflation ‌and batter its currency.

Economic growth in the South Asian nation, only just recovering from a devastating 2022 financial crisis that left businesses ‌and households deeply scarred, is expected to take a hit from the turmoil in the Middle East.

The Central Bank of Sri Lanka (CBSL) raised the overnight policy rate to 8.75% from 7.75%, ​blaming higher inflation and a depreciating rupee due to the U.S.-Israeli war with Iran.

Seven out of a dozen economists and analysts polled by Reuters had forecast only a 25 basis-point or slightly higher change to the rate, citing the deepening impact on foreign reserves from the conflict and the rupee currency's 8.7% tumble since early March.

"Today’s sharp increase in interest rates in Sri Lanka highlights the country’s vulnerability to the crisis in the Middle East, and is unlikely to be ‌the last unless the crisis subsides soon," Capital Economics' ⁠senior Asia economist Gareth Leather said.

At a post-policy press conference, Governor P. Nandalal Weerasinghe said the hike "will help stabilise exchange rates and inflation."

He said the central bank "will take action to curb demand side pressures" after assessing incoming economic data ⁠and emerging risks.

The CBSL expects economic growth and inflation to maintain a "reasonable" pace, he added.

Sri Lanka, fully reliant on imported fuel, has been battered by the Iran war-driven energy shock that has forced a 40% fuel price hike, rationing, and even public holidays on Wednesdays.

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Annual inflation has jumped from 2.2% in March to 5.4% last month, ​although ​that is well below the 70% peak during the crisis.

Headline inflation is likely to ​remain above the target of 5% in the period ahead, ‌before easing and stabilising around it, the CBSL said in a statement.

Sri Lanka's stock market was down 0.75% after the policy announcement, while the currency hugged tight ranges to fetch 321 rupees per dollar.

BIGGEST HIKE SINCE MARCH 2023, GROWTH RISKS RISE

Tuesday's rate hike - the first change since a 25-basis-point cut in May 2025 aimed at boosting growth - marked the largest increase since a similarly sized move during the depths of the financial crisis in March 2023.

"This 100bps rate hike suggests the CBSL is shifting gears from supporting growth to defending price stability," said Udeeshan Jonas, strategy head at Colombo-based equity research ‌firm CAL. He has cut his 2026 growth forecast to 3.0% from 4.2% following the ​move.

The central bank and finance ministry had forecast growth of between 4% and 5% in ​January. Governor Weerasinghe said Sri Lanka could still grow at the "lower ​band of the 4%-5%" projection.

Emerging economies are bearing the brunt of the Iran war as soaring energy prices, supply ‌disruptions, and capital outflows threaten to trigger stagflation. India, which ​depends heavily on overseas crude imports, is ​grappling with a sharp decline in the rupee, forcing the central bank to step in to defend the currency.

Sri Lanka's reserves decreased 3.8% to $6.7 billion in April after it spent $1.5 billion on fuel imports in the first four months of the year, with the fuel bill ​surging 77% in March alone.

The island, backed by a $2.9 ‌billion International Monetary Fund programme, is clawing its way out of the 2022 upheaval triggered by a severe shortage of dollars. ​The IMF board meets on Wednesday to decide on a $700 million tranche to Sri Lanka under the programme, which would help ​bolster its reserves.

(Reporting by Uditha Jayasinghe; Editing by YP Rajesh and Shri Navaratnam)

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May 26, 2026

Sri Lanka stuns with 100-bp rate hike as Iran war rattles currency, fuels inflation

By Uditha Jayasinghe COLOMBO, May 26 (Reuters) - Sri Lanka's central bank stunned markets by raising its policy rate by an ou...

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Explainer-What's involved in talks to end the Iran war?

LONDON/DUBAI, May 26 - U.S. Secretary of State Marco Rubio said on Tuesday that negotiating a deal with Iran could "take a few days," dimming hopes for an imminent end to the conflict after the U.S. conducted what it called defensive strikes in southern Iran.

Iran's foreign ministry spokesperson said earlier that conclusions had been reached on ‌many topics discussed in a potential 14-point memorandum of understanding, but this did not mean a deal to end the war would be reached soon.

AT WHAT STAGE ARE THE DISCUSSIONS?

Following ‌a ceasefire in early April, the two sides have remained at odds on difficult issues including Iran's nuclear ambitions, Israel's war in Lebanon with the Iranian-backed Hezbollah militia and Tehran's demands for the lifting of sanctions and the release of frozen ​assets.

After weeks of mainly indirect talks, both sides say they have made progress on a memorandum of understanding that would halt the war and give negotiators 60 days to reach a final deal.

The framework is focused on an end to the war and a U.S. naval blockade, in exchange for Tehran taking steps to ensure safe transit in the Strait of Hormuz, according to the Iranian foreign ministry spokesperson, Esmaeil Baghaei.

Senior Iranian diplomat Hossein Nooshabadi told ISNA news agency that the possible framework deal included the end of the war on all fronts including Lebanon, the release of blocked Iranian assets, the lifting of the U.S. ‌naval blockade and the opening of the Strait of Hormuz, the ⁠withdrawal of U.S. forces from the vicinity of Iran and freedom to sell Iranian oil.

Nooshabadi said Iran's draft for an initial agreement contained no commitments on Iran's nuclear programme.

A senior official in U.S. President Donald Trump's administration, speaking on the condition of anonymity, said Iran had agreed "in principle" to open the Strait ⁠of Hormuz, in exchange for the U.S. lifting its naval blockade, and to dispose of Tehran's highly enriched uranium.

Iranian sources said a framework deal is only about ending the war on all fronts, establishing a 30-day framework for movement through Hormuz and shipping, and possibly providing some financial relief.

It would then be followed by negotiations on the more difficult issues, such as the status of Iran’s highly enriched uranium and details concerning the Strait, ​and ​the sequencing of the many points mentioned in the preliminary deal such as sanctions relief and security measures.

HOW COULD ​A DEAL MOVE FORWARD?

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If Iran's Supreme National Security Council approves the memorandum of ‌understanding, it will then be sent to the country's supreme leader for final approval.

The U.S. understood Supreme Leader Ayatollah Mojtaba Khamenei had endorsed the broad template of the deal, the senior U.S. official said.

If the first phase of the agreement progressed, the nuclear issue could be reviewed and negotiated during the 60-day period, Baghaei and Nooshabadi said.

The last deal over the nuclear programme - struck in 2015 and torn up by U.S. President Donald Trump in 2018 - took years of negotiations between large teams of technical experts.

WHAT ARE THE MAIN ISSUES?

HORMUZ AND GULF BLOCKADE - Tehran sees its control of Hormuz and Washington views its blockade of Iranian ports as their chief points of leverage.

NUCLEAR - The United States believes Iran wants to build a nuclear bomb. Iran has always denied this, saying its atomic programme is for ‌peaceful purposes only. The focus is on its enrichment of uranium, which generates fuel for nuclear power but can ​also make material for a warhead. An agreement may eventually be possible including a lengthy moratorium on enrichment and the export ​or dilution of the stockpile.

The nuclear question is extremely complicated. Iran might eventually agree to ​dilute part of its highly enriched uranium in a friendly country into uranium enriched to 5% purity and then have it returned, Iranian sources said.

But many ‌other issues would still need to be addressed: how long the nuclear program ​would be halted, whether nuclear sites would be dismantled ​during that period, what happens to stockpiles of uranium enriched to 20% and 5%, and the future of Iran’s advanced centrifuges and research and development programs, among others.

BALLISTIC MISSILES - A main U.S. demand before the war was that Iran limit the range of its ballistic missiles so that they could not reach Israel. Iran has always refused to discuss its ​ballistic missiles, saying its right to conventional weapons cannot be on the ‌table and that it still has a large arsenal.

SANCTIONS AND FROZEN ASSETS - Iran's economy has been hurt by sanctions for years, contributing to the nationwide unrest in January. ​Tehran badly needs them to be lifted and tens of billions of dollars of Iranian oil revenues frozen in foreign banks to be released. It also wants reparations ​for war damage.

(Reporting by Parisa Hafezi; Writing by Angus McDowall and Michael Georgy; Editing by Aidan Lewis)

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May 26, 2026

Explainer-What's involved in talks to end the Iran war?

LONDON/DUBAI, May 26 - U.S. Secretary of State Marco Rubio said on Tuesday that negotiating a deal with Iran could "take a few day...

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Queen Elizabeth Style Exhibit at Buckingham Palace Shares an Exciting Announcement amid Record-Breaking Run

A landmark exhibition of the late Queen Elizabeth's wardrobe shared an exciting announcement

NEED TO KNOW

• The display at the King's Gallery contains more than 300 items from the late Queen's collection

• It is on pace to be the most-visited exhibition in the history of the Royal Collection

The lateQueen Elizabethis still breaking records.

The exhibition of the history-making monarch's outfits, hats and other accessories, which went on show around her 100th birthday in April, has sold out its initial run. And now, curators have announced that it will run for another six months at the King's Gallery, adjacent to Buckingham Palace.

The initial dates sold out within weeks, meaning around 200,000 visitors will see it before the original close date of Oct. 18. Now, there could be another 200,000visitors in the period until April 18, 2027, when it is now scheduled to close. It means it will be the most visited exhibition in the history of the Royal Collection Trust, which looks after and manages the royals' garments and other historic items and heirlooms.

TheQueen Elizabeth II: Her Life in Styleshow contains never-before-seen childhood dresses to the Queen's wedding necklaces, tiaras and even the dress worn by her stunt double for the London 2012 Olympics ceremony. Around half of the items are on display for the first time.

“With over 300 pieces in the exhibition, it is the most thorough examination of her clothing collection, which I hope will help visitors understand why fashion was so important in the Queen’s role,” Caroline de Guitaut, curator of the exhibition, told PEOPLE around the launch in April.

Tim Knox, the director of the Royal Collection, said in a statement on May 22, "The response to this exhibition has been unprecedented. We are delighted to extend its run, ensuring that even more people from across the UK and around the world will have the chance to experience this once-in-a-generation tribute to Queen Elizabeth II’s life and legacy, in line with our charitable aim to share the Royal Collection as widely as possible."

What de Guitaut calls an "exciting discovery" was a pair of gold lame dresses made by Jeanne Lanvin for the then Princess Elizabeth and her sister,Princess Margaret.

“They are fascinating from a fashion history perspective, and they beautifully illustrate that interface between Paris and London at that time,” the curator, who has worked for the Royal Collection Trust for over three decades and organized many royal clothing exhibitions during her career, added.

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There were also treasured items from the royal's childhood, including some of her very first pieces of couture. One of those is a silver lame bridesmaid dress, designed by Edward Molyneux, that the princess wore at age 8 to the wedding of her uncle the Duke of Kent to Princess Marina of Greece in 1934. There is also Elizabeth's dress from her wedding to Prince Philip and the coronation gown from 1953.

Another standout was a cornflower blue skirt, appliqued with little figures of Romeo and Juliet and intricate trailing roses, which was gifted to the Queen on her visit to Ottawa, Canada, in 1951. The Queen wore it that same evening and was photographed being twirled on the dance floor byPrince Philip(who wore jeans and a neckerchief!).

“Considering its age, it’s so pristine, and it’s just a really fun piece,” the art historian and curator explained. “You can interpret it however you want, but I think it does perhaps indicate someone who is prepared to dress up and have fun with clothes.”

De Guitaut told PEOPLE what she hopes visitors will learn from the groundbreaking exhibition. “She was so often compared to her sister, Princess Margaret, who was wearing Dior and considered to be the more fashionable of the two princesses,” de Guitaut said. “Something that has been interesting to me is hopefully debunking that myth because clearly she really did care what she looked like, and she absolutely was involved and interested. And it’s that level, the personal connection and the degree of that personal connection with her designers, has been quite revelatory.”

With demand high and ongoing, visitors are encouraged to book tickets in advance For those who can't make it to the exhibition at the King's Gallery in London,there is an official accompanying bookQueen Elizabeth II: Fashion and Style, by de Guitaut.

Can't get enough of PEOPLE's Royals coverage?Sign up for our free Royals newsletterto get the latest updates on Kate Middleton, Meghan Markle and more!

In another marking of the centenary of the Queen's birthday, the Royal Collection has opened the private apartments used by the Queen when she was in residence at the Palace of Holyroodhouse, Edinburgh. It's the first time they have been able to be seen by visitors,and the tours will run for 100 days.

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May 26, 2026

Queen Elizabeth Style Exhibit at Buckingham Palace Shares an Exciting Announcement amid Record-Breaking Run

A landmark exhibition of the late Queen Elizabeth's wardrobe shared an exciting announcement NEED TO KNOW The ...

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What we know and don't know about the emerging deal to end the Iran war

CAIRO (AP) — A deal appears to be emerging between the United States and Iran to endthe warand open theStrait of Hormuz, and U.S. President Donald Trump over the weekend said it had been“largely negotiated.”

Iran War

It is not clear when or how the deal might be finalized and when its various parts will take effect. Trump spoke after calls with allies in the Middle East, including a separate call withIsrael. Details come from two regional officials and a U.S. official who spoke on condition of anonymity to discuss the sensitive negotiations.

Here’s what we know and don’t know:

The war would end

In the 12 weeks since the U.S. and Israel launched the war with attacks on Iran that killed senior officials including Supreme Leader Ayatollah Ali Khamenei, Tehran has insisted that any deal focus on ending the fighting on all fronts. That includes Lebanon, where the Iranian-backedHezbollahmilitant group has been fighting Israel since two days into the war.

A fragile ceasefire has held since April 7. An end to the war would ease concerns throughout a region that saw Gulf havens and travel hubs like the United Arab Emirates struck by Iranian missiles and drones. It would allow for global shipping, including an estimated 20% of the world's oil and natural gas, to begin flowing through the Strait of Hormuz again. It also would allow the rebuilding of energy and other infrastructure in the region.

Both regional officials said the draft deal includes an end to the war between Israel and Hezbollah, as well as a commitment to not interfere in the domestic affairs of countries in the region including Iran. That’s a critical reference to Iran’s support for proxies, which also include the Houthi rebels in Yemen, Hamas militants in Gaza and Shiite armed groups in Iraq.

The U.S. wants Israel to have a free hand to respond to what it views as threats in Lebanon while Iran rejects it, one regional official said. The U.S. official said the deal would guarantee Israel’s right to act against imminent threats in self-defense.

The Strait of Hormuz would reopen gradually

Iran’s nuclear program, missile program and support for armed proxies were the stated reasons for the U.S. and Israel attacking Iran. But Tehran’s retaliatory grip on the Strait of Hormuz quickly shot to the top of global concerns as hundreds of ships carrying oil, natural gas, fertilizer and other supplies were stranded.

Under the emerging agreement, the strait would gradually reopen in parallel with the U.S. ending theblockade of Iran’s portsit launched on April 17, the regional officials said. The blockade has limited Iran’s ability to ship its oil and bring in badly needed cash for its long-suffering economy.

The U.S. would allow Iran to sell its oil through sanctions waivers, said one of the officials, who has been briefed on the negotiations. Sanctions relief and the release of Iran’s billions of dollars in frozen funds would be negotiated during a 60-day period, the official said.

Iran would give up its stockpile of highly enriched uranium

Iran’s nuclear program and international concerns over its possible pursuit of a nuclear weapon underlie all tensions, and the U.S. and Israel have considered highly complex military operations to go in and take out its highly enriched uranium.

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Under the potential deal, Tehran would agree to give up that stockpile of highly enriched uranium, according to the regional officials. One official, with direct knowledge of the negotiations, said how Iran would give it up would be subject to further talks over the 60-day period. Some would likely be diluted and the rest transferred to a third country, potentially Russia, the official said. Russia has offered to take it.

A U.S. official confirmed the 60-day period and said if Iran doesn’t give up its stockpile, there will be no sanctions relief.

Iran has 440.9 kilograms (972 pounds) of uranium that is enriched up to 60% purity, a short, technical step from weapons-grade levels of 90%, according to the International Atomic Energy Agency.

Iran says it has an “inalienable” right to nuclear technology while insisting its program is peaceful. On Sunday, President Masoud Pezeshkian told state TV they were ready “to assure the world that we are not after a nuclear weapon.”

Trump on Sunday on social media said that “our relationship with Iran is becoming a much more professional and productive one. They must understand, however, that they cannot develop or procure a Nuclear Weapon or Bomb.”

What appears to be missing

Other issues have not been mentioned in descriptions of the emerging deal, including the status of Iran's uranium enrichment.

Another is Iran's missile program, which Israel in particular has sought to destroy.

And while the United States and Israel entered the war with stated ambitions of seeing Iranians rise up against their government after nationwide protests early in the year, any discussion of leadership change in Tehran appears to be out.

As for Iran's past stated aims during negotiations, there appears to be no mention of any withdrawal of U.S. forces from the region, or for reparations for the damage the war has caused.

Superville reported from Washington and Anna from Lowville, New York.

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May 25, 2026

What we know and don't know about the emerging deal to end the Iran war

CAIRO (AP) — A deal appears to be emerging between the United States and Iran to endthe warand open theStrait of Hormuz, and U.S. Presi...

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Iran says conclusions reached on many topics in potential U.S. memorandum but no deal imminent

May 25 (Reuters) - Iran's foreign ministry spokesperson ‌said on Monday ‌that conclusions have been ​reached on many topics discussed in a potential memorandum of understanding ‌with ⁠the U.S., but this does not ⁠mean Tehran is close to signing ​an agreement.

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The ​spokesperson, ​Esmaeil Baghaei, ‌added that Iran is negotiating an end to the war and is not currently ‌discussing nuclear ​issues, and ​repeated ​that changes in ‌the positions of ​U.S. ​officials create problems for any agreement.

(Reporting ​by ‌Elwely Elwelly and Tala ​Ramadan; Editing by ​Andrew Cawthorne)

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May 25, 2026

Iran says conclusions reached on many topics in potential U.S. memorandum but no deal imminent

May 25 (Reuters) - Iran's foreign ministry spokesperson ‌said on Monday ‌that conclusions have been ​reached on many topics discuss...

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Kathy Garver Shares the ‘Special’ Agreement Brian Keith Made with “Family Affair ”Producers So He Didn’t Have to Waste Time on Set

In a recent interview, Kathy Garver reflected on how Brian Keith's limited filming schedule shaped the production of Family Affair

NEED TO KNOW

• Because Keith was contracted to leave after a set number of shooting days, the entire series had to be fully scripted and tightly scheduled before filming began

• Despite the demanding pace, Garver said Keith's grounded presence helped balance the show's tone and kept it from becoming overly sentimental

Kathy Garver is best known for her role onFamily Affair, and in a recent interview withWoman's World, the now-80-year-old actress discussed the unusual production rhythm shaped in part by her costar Brian Keith.

In order to accommodate his limited availability and busy schedule, the studio created a tightly coordinated workflow behind the scenes that impacted the way the entire series was planned and filmed.

“It was a crazy production schedule. We had a brilliant associate producer who was just so good at arranging the scenes and where we were going to be shooting and at what time,” Garver told the outlet.

“Now, Brian had this special thing that he had to be out in 60 days because at that time, movie stars did not do TV. Oh my God, not that little box," she continued. "So they made a deal with Brian and he could just shoot his scenes and then go off and do his movies.”

That agreement, Garver explained, placed an unusual amount of pressure on the production team from the very start.

With Keith's time on set strictly limited, every episode had to be fully prepared before filming even began, leaving little room for improvisation once cameras rolled.

Garver noted that the workload extended across the entire cast and crew, especially the younger actors whose schedules were carefully regulated.

“What that meant was all 39 scripts had to be finished before we even started,” she revealed. “Then the children could only work four hours a day because they had to go to school for three hours and there was an hour for lunch.”

Even with those pressures, Garver remembered the set as remarkably efficient and professionally run. The pace was fast but organized, with a cast and crew experienced enough to keep production moving smoothly day after day.

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“We were boom, boom, boom,” she recalled. “We were working with such professionals — Brian and Sebastian and our directors, who had done all the Abbott and Costello films.”

That level of experience behind the camera helped the series maintain consistency despite its unusual logistical constraints.

Never miss a story — sign up forPEOPLE's free daily newsletterto stay up-to-date on the best of what PEOPLE has to offer​​, from celebrity news to compelling human interest stories.

And at the center of it all was Keith himself, whose presence helped shape both the tone of the show and the atmosphere on set.

During her interview withWoman's World, Garver spoke warmly about working with him, noting that he brought humor, strengthand a grounded sensibility to the production. She described him as someone who was not only entertaining but also genuinely kind, particularly with the younger cast members.

“I really liked Brian a lot,” she admitted. “He was just a great guy. He was handsome, anecdotal, funny and he was good. He was very kind to children. He loved kids. He spoke his mind when he didn't like some of the guest stars on the show, but he was the real thing.”

For Garver, Keith's grounded presence prevented the show from becoming overly sentimental, instead adding a sense of realism to its family dynamic.

“What really kept it from being too saccharine — because some of the scripts kind of leaned to it — was Brian. He was a wonderful antidote to too much sugar. He was a manly man… very realistic,” she told the outlet. “That was Brian.”

Read the original article onPeople

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May 25, 2026

Kathy Garver Shares the ‘Special’ Agreement Brian Keith Made with “Family Affair ”Producers So He Didn’t Have to Waste Time on Set

In a recent interview, Kathy Garver reflected on how Brian Keith's limited filming schedule shaped the production of Family Affair ...

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9-story building under construction in the Philippines collapses, leaving 21 people missing

ANGELES, Philippines (AP) — A nine-story building under construction in a city north of the Philippine capital of Manila collapsed before dawn and at least 21 people were missing Sunday morning, authorities said.

Rescuers were “hearing voices” in the rubble, while 24 workers managed to dash to safety or were rescued, police and other officials said.

The building collapsed after a fierce thunderstorm in Angeles City in Pampanga province. More than 100 police and other government personnel were scrambling to rescue those believed to be trapped in the rubble, police Brig. Gen. Jess Mendez said.

Mendez and other officials at the scene said there were no immediate reports of deaths but some of those who got out safely sustained injuries.

Among the 21 people who remained unaccounted for, most were believed to be workers at the building, according to Francis Pangilinan, who heads Angeles City’s disaster mitigation office and was at the scene.

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Two other people, including a Malaysian tourist, were injured when their lodgings were hit by debris from the collapsed building, officials said.

Rescuers including firefighters, police and disaster-response teams used their hands and sniffer dogs in a dangerous scramble to search for the trapped survivors, Public Works Secretary Vinzon Dizon told reporters near the rubble of concrete slabs, twisted iron bars and other debris.

“There are some signs of life ... There are voices that are being heard,” Dizon said, adding that rescuers were moving with extreme caution. “It’s a very very unstable site and the priority is to get the people out.”

Angeles City hosted one of the largest U.S. Air Force bases outside of the American mainland until it closed in the early 1990s, helping develop Angeles and outlying cities and towns into entertainment and commercial hubs in the main northern Philippine region of Luzon.

The former air base, now called the Clark Freeport Zone, is about 80 kilometers (50 miles) north of Metro Manila.

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May 24, 2026

9-story building under construction in the Philippines collapses, leaving 21 people missing

ANGELES, Philippines (AP) — A nine-story building under construction in a city north of the Philippine capital of Manila collapsed befo...

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