Sri Lanka’s gross official reserves have surged past the US$ 5.0 billion mark for the first time since December 2020, marking a significant milestone amidst economic challenges stemming from the pandemic. According to Central Bank Governor Dr. Nandalal Weerasinghe, as of April’s end, the foreign currency reserves stood at US$ 5,438 million, reflecting a robust increase of US$ 487 million within the month.
This April record also represents the highest reserves level since January 2021 when reserves reached US$ 4,814.6 million. The subsequent decline in reserves was attributed to weakened foreign currency inflows from tourism and remittances, exacerbated by significant outflows from debt repayments and increased imports due to rising global commodity prices.
To bolster reserves, Sri Lanka secured a Yuan denominated currency swap line worth approximately US$ 1,400 million from the People’s Bank of China, initially offered in March 2021 and activated in December 2021 when usable reserves were dwindling.
Dr. Weerasinghe highlighted these developments during a press conference, emphasizing the importance of sustainable economic stability. The resurgence in foreign currency inflows from remittances, tourism, and exports, combined with measures such as import restrictions and tight monetary policy, contributed to stabilizing the economy.
With demand conditions still subdued, the Central Bank plans to ease monetary policy to stimulate demand, aiming to further bolster economic recovery.
Source – dailymirror.lk
