Sri Lanka forex reserves grow to US$8.9bn in June

ECONOMYNEXT – Sri Lanka’s forex reserves grew to 8.9 billion US dollars in June 2019 from 6.7 billion US dollars, in May a central bank official said.

The reserves rose mainly due to a bond sale by the government, the central bank’s head of economic research Y  Indratne said.

Sri Lanka’s central bank stopped hemorrhaging reserves from January 2019 after monetary instability triggered by a liquidity shock in August 2018 ended.

From October capital flight was worsened after a political crisis triggered uncertainty.
Credit has contracted in the first five months of 2019, slowing economic activity and imports, allowing the central bank to buy dollars.

The rupee has also appreciated amid weak credit. (Colombo/July11/2019)