Central bank net foreign exchange reserves rise

Sri Lanka’s central bank’s net foreign assets rose to about 310 million US dollars in November 2024, as official data show, as it bought foreign exchange outright through deflationary policy and settled reserve-related liabilities.

Central bank data show that net foreign assets climbed from 18.6 billion rupees (about $63mn) in September 2024 to 91 billion rupees in November 2024.

The net foreign assets of Sri Lanka’s central bank slipped into negative around August 2021 as it spent borrowed reserves to pay for imports and offset the interventions through mainly inflationary open market operations to stop market interest rates from balancing credit.

In November Sri Lanka’s gross official reserves, which comprise the central bank’s gross reserves (including a swap from China) and Treasury balances, were 6.4 billion dollars.