Sri Lanka’s foreign reserves reach $3.1 billion-Central Bank

Sri Lanka’s foreign reserves with expected foreign currency inflows has reached around US$3.1 billion, and is expected to remain at such levels by end of 2021, as well, the Central Bank (CB) announced on Wednesday.

It said in addition, as articulated in the 6-month Road Map for “Ensuring Macroeconomic and Financial System Stability”, foreign currency inflows in connection with several other facilities that are under negotiation at present, are expected to be realised in the early part of January 2022.

The CB statement said that the measures taken by the Central Bank with a view to improve foreign exchange liquidity in the domestic market, such as introduction of incentive schemes for workers’ remittances, and the rules covering the repatriation and conversion of exports proceeds are also augmenting official reserves.

“The Government and the Central Bank are confident that the reserve position will remain at comfortable levels throughout the year 2022. In this background, it is unfortunate that the hasty and inexplicable decisions of certain rating agencies to downgrade the Sovereign, even in the face of clear reassurances of impending forex inflows had caused unnecessary losses in the secondary market to investors in International Sovereign Bonds issued by the Government of Sri Lanka. Such rating actions also weighed negatively on investor confidence, resulting in undue delays in certain expected foreign currency inflows which may have materialised earlier, if not for such unwarranted and questionable rating actions,” the statement added.

Meanwhile, Central Bank Governor Ajith Nivard Cabraal said on Twitter that in keeping with with the CBSL's previous announcements, the official reserve position of the CBSL has today reached appox USD 3.1 billion and will remain around that level by end 2021 as well.

Sri Lanka's foreign reserves had dwindled to just USD 1.5 billion by end of November.