The Central Bank of Sri Lanka says that the fall in the country’s net foreign reserves in August is a misinterpretation and an unnecessary fear. The country has faced about 15 such incidents in the past and the situation has been brought under control as a continuous process is underway to control the situation, said the Governor of the Central Bank, Ajith Nivard Cabraal.
He added that the country’s gross foreign reserves currently stand at $ 4.1 billion due to the $ 1.5 billion exchange facility of the People’s Bank of China.
The central bank’s net foreign exchange position fell to a negative level in July with $ 400 million in payments, surpassing the country’s reserves, which had fallen to $ 962 million in August.
Mr Cabraal, however, said that one transaction could reverse the negative.
“Our recent move to expand foreign reserves is illustrated in our short-lived roadmap. Despite the challenges, Sri Lanka has repaid $ 6 billion worth of foreign debt so far this year, more than the equivalent amount paid in 2020,” he said.
According to the Central Bank’s short-term roadmap for the next six months, Sri Lanka is expected to receive nearly $ 7 billion between October and December and about $ 11 billion between January and March next year. Sri Lanka has $ 5 billion in foreign debt repayments next year and a further $ 25 billion in liabilities between 2023 and 2027
