ECONOMYNEXT – Sri Lanka’s Central Bank sold a net US$211.3 million in May, official data showed, amid high depreciation pressure on the rupee with the local currency touching a four-year low.
The Central Bank bought US$12 million and sold US$223.3 million in May, bucking the trend of being a net purchaser building up foreign currency reserves.
The Central Bank, however, has net bought US$485.9 million in the first five months of this year following a net purchase of US$2 billion last year.
The rupee was under high downward pressure during last month as the imports bill for fuel went up unusually amid continued demand for dollars to buy new vehicles.
Sri Lanka’s Central Bank became a net dollar seller for the first time in 22 months in April after it had been buying the U.S. currency to build reserves to meet the targets the island nation agreed with the IMF.
The Central Bank sold US$13 million on a net basis in April this year. It last sold dollars on a net basis before that in June 2024.
Despite the Central Bank’s net dollar sales for the second month, the gross official reserves grew 1.7 percent to US$6,873 million by end May, up from US$6,759 million a month before.
The dollar selling by the central bank comes amid sharp depreciation of the rupee currency. It depreciated more than 4% in the month of May, official data showed.
Sri Lanka has been repaying its multilateral and bilateral loans, though it has yet to resume repaying sovereign bond holders.
The Central Bank has been building reserves aggressively ahead of the repayment of foreign debts to sovereign bond holders. This repayment is scheduled to start from April 2028. (Colombo/June 07/2026)