ECONOMYNEXT – Sri Lanka’s foreign reserves, which are now at 3.6 billion dollars following a dip in August, is still a significant improvement from negative reserves just last year and are in line with targets, State MInister of Finance Ranjith Siyamabalapitiya said.
The state minister said Sri Lanka may have to manage its existing reserves and use it to appreciate the rupee and to service some debt.
“Though it is said we’re not repaying loans at the moment, that’s only true for bilateral loans. Other debt is being repaid. In such instances, we have to manage our reserves in different ways,” he said.
The Central Bank of Sri Lanka (CBSL) in August repaid a swap borrowed from Bangladesh’s central bank.
“Last year, we were among countries with the lowest levels of state revenue,” said Siyambalapitiya.
“We had negative reserves. We now have 3.6 billion US dollars in reserves. This has moved us closer to our targets and to our agreements with the International Monetary Fund (IMF),” he said.
Commenting on spending the reserves, he said: “We need not panic about that. What we need to find out is the difference between where we were and where we are now. It is significant that we’ve come to 3.5 from negative.”
Official data showed that Sri Lanka’s forex reserves dropped 164 million US dollars in August 2023 to 3,598 million US dollars, ending several months of steady reserve gains. Foreign reserves grew 38 million US dollars to 3,762 million in July 2023 up 1 percent from a month earlier. (Colombo/Sep11/2023)