Gross official reserves increases to USD 5 Bn

For the first time after several years, Gross official reserves (GOR) increased to US dollars 5.0 billion by end March 2024.

This included the swap facility from the People’s Bank of China (PBOC) equivalent to around US dollars 1.5 billion, which is subject to conditionalities on usability. The increase of the GOR was mainly due to the substantial net purchases of foreign exchange from the domestic foreign exchange market by the Central Bank.

Net intervention in March 2024 was US dollars 715 million, (based on trade date) and during the first quarter of 2024, the net purchases amounted to US dollars 1.2 billion. Import coverage of GOR (including the PBOC swap), remained above 3 months of imports since December, 2023. The Sri Lanka rupee continued its appreciating trend amidst some volatility.

Meanwhile the Sri Lanka rupee appreciated by 9.1% against the US dollar during the year up to April 30, 2024. Meanwhile, reflecting cross-currency movements, the Sri Lanka rupee appreciated against other major currencies, such as the euro, the pound sterling, the Japanese yen, the Indian rupee, and the Australian dollar during the year up to 30 April 2024.

The deficit in the merchandise trade account narrowed to US dollars 369 million in March 2024 from US dollars 412 million recorded in March 2023, primarily due to a higher increase in exports than the increase in imports. However, it widened compared to February 2024 (US dollars 319 million). Meanwhile, the cumulative deficit in the trade account during January to March 2024 was higher (US dollars 1,229 million) than the deficit recorded over the same period in 2023 (US dollars 896 million).

Earnings from merchandise exports increased by 9.8% to US dollars 1,139 million in March 2024 compared to US dollars 1,037 million in March 2023. There was an increase in earnings across all major categories of exports, where industrial exports increased the most.

Expenditure on merchandise imports recorded an increase of 4.0% to US dollars 1,508 million in March 2024 compared to US dollars 1,450 million in March 2023. Expenditure across all major import categories increased, although intermediate goods led by fuel imports increased the most.

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