Sri Lanka’s gross official foreign exchange reserves tumbled to $ 4.02 billion at end of May from $4.5 billion a month ago as the country faces $3.5 billion external debt servicing within the next three months including $1 billion ISB maturity in July.
The country’s FX reserves consisted of $ $3.5 billion in Foreign Currency Reserves and $410.7 million in Gold Reveres. It didn’t include the $1.5 billion swap facility in place with the People’s Bank of China (PBoC) which is tied to several trade-related conditions. Further, Bangladeshis gave principal approval for an up to $500 million swap facility with the Central Bank of Sri Lanka (CBSL) recentlty. The government is engaged in discussions for several other SWAP lines, including India, according to media reports.
Main FX inflows were $431.8 million from Workers’ Remittances and $2 million inflows from tourist receipts in the month. The export earnings and import expenditure data were yet to be released by the CBSL. Compared to last year, the country’s petroleum import bill has been rising significantly as the global oil prices started to recover at a steady pace.
Sri Lanka has several import restrictions in place in various forms to curb FX outflows on goods such as motor vehicles and agricultural products. The government so has far ruled out seeking IMF assistance.
In May, the Central Bank of Sri Lanka (CBSL) purchased $13.57 millon and sold $10 million in the FX market.
During the year up to 11th June 2021, the Sri Lankan rupee depreciated against the USD by 6.7 percent. Given
the cross-currency exchange rate movements, the Sri Lankan rupee depreciated against Great Britain’s pound sterling by 10.1per cent, the Indian rupee by 6.9 percent, the Euro by 5.7 percent, and the Japanese yen by 1.0 percent during
this period.