Sri Lanka’s Central Bank records increase in foreign reserves by end June 2019
The Central Bank of Sri Lanka has reportedly announced that the country’s gross official reserves have reached US$ 8.9 billion by end June 2019, following the receipt of the proceeds of the International Sovereign Bonds (ISBs), providing an import cover of 5.1 months.
The successful issuance of the ISBs in June 2019 reflected investors’ continued confidence on Sri Lanka’s medium-term growth prospects, the Central Bank of Sri Lanka has stated.
According to the Central Bank’s report released to the media, the contraction in the trade deficit and the receipt of the proceeds from the ISBs, along with the continuation of the International Monetary Fund (IMF) programme have eased the pressure on the exchange rate, resulting in the rupee recording a cumulative appreciation of 4.1 percent against the dollar thus far in 2019.
Accordingly, the appreciation of the rupee has partially corrected its sharp depreciation observed in late 2018.
The sharp decline in imports amidst the continuous growth in exports has reportedly led to a further contraction in the trade deficit during the first four months of 2019.
The Bank has further noted that in relation to other inflows to the current account, earnings from tourism have suffered a setback following the April terror attacks, while inflows from workers’ remittances have remained moderate.
The Central Bank has added that a sizable downward adjustment in market lending rates is expected in the near term and private sector credit to pick up gradually towards the latter part of 2019.OSL take:
The latest report by the Central Bank of Sri Lanka highlighting the increase in foreign reserves, maintaining policy interest rates and the easing of pressure on the rupee are all indicative of an economy on a buoyant growth path. Sri Lanka’s economic policies have been recognized by foreign lending agencies like the IMF, World Bank and ADB, which have expressed confidence in Sri Lanka and expressed willingness to assist the country. The country’s economic policies have also helped the growth of several key economic sectors in the country. This has resulted in the opening of many business/investment opportunities along with the aggressive development programme undertaken by the government of Sri Lanka. The country is therefore a hotbed for foreign investments and interested businesses/investors could explore opportunities in Sri Lanka.
| Article Code : | VBS/AT/12072019/Z_3 |