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Sri Lanka forex reserves at US$4.6bn in February 2021

ECONOMYNEXT – Sri Lanka’s forex reserves were estimated at 4.6 billion US dollars in February 2021, down from 4.8 billion a month earlier, Director of Economic Research, Chandranath Amarasekara said.

“Official reserves were provisionally estimated at 4.6 billion dollars by the end of February,” Amarasekara said.

The central bank repaid a 400 million US dollar swap to the Reserve Bank of India in February 2021.

It had not sold any dollars to defend the rupee during the month, Deputy Governor Dhammika Nanayakkara said.

In January private credit was weak at 25 billion rupees, down from 74 billion rupees a month earlier.

In December private credit goes up partly due to year end New Year activities and partly due to liberal lending to boost balance sheets and in January credit turns negative in some years, watchers of Sri Lanka’s monetary system say.

Credit generally pick up in from around February, which also coincides with government salary hike (there are no salary hikes in 2021) which and the credit system tends to get pressure from around March.

Several currency crises in the country had had their roots in the March to May period, coinciding with a recovery in credit, long time watchers of soft-peg crises in the island say. (Colombo/Mar04/2021)

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