'Import expenditure expands, trade account deficit widens to USD 859 mn
Import expenditure continued to expand, in spite of high earnings from exports exceeding US dollars 1.0 billion for the eighth consecutive month, thereby widening the deficit in the trade account in January 2022, compared to January 2021 to US dollars 859 million in January 2022, compared to the deficit of US dollars 655 million recorded in January 2021, with higher increase in imports.
However, trade deficit in January 2022 narrowed compared to the deficit of US dollars 1,085 million recorded in December 2021.
Tourist arrivals showed a notable recovery in January 2022 over the same month in the previous year, while moderation of workers’ remittances was observed in January 2022.
Meanwhile, Sri Lanka successfully settled the International Sovereign Bond (ISB) of US dollars 500 million in January 2022.
The financial account of the balance of payments strengthened during the month with the receipt of the SAARCFINANCE swap facility from the Reserve Bank of India. 
Earnings from the exports of industrial goods increased by 21.6 % in January with broad-based increase were reported in almost all subcategories of Industrial goods, mainly in garments and petroleum products.
Export of garments to all major markets improved, except for the United Kingdom (UK).
Total earnings from the exports of agricultural goods in January 2022 increased by 2.3% compared to January 2021, primarily due to the increase in export earnings from coconut (mainly desiccated coconut, fibres and coconut oil), seafood (mainly fresh and frozen tuna) and minor agricultural products (mainly areca nuts).
Rupee depreciates by 33 %
As the Central Bank allowed greater flexibility in the exchange rate, a notable upward adjustment in the exchange rate was observed from March 2022.
In the first two months of 2022, the Sri Lankan rupee was kept broadly stable, but it depreciated substantially thereafter, as a result of the Central Bank decision to allow greater flexibility in the determination of the exchange rate in the first week of March 2022. Accordingly, during the year up to April 1, the rupee recorded a depreciation of 33 % against the US dollar.
Meanwhile, reflecting cross-currency movements, the Sri Lanka rupee depreciated against the euro, the pound sterling, the Japanese yen, the Australian dollar and, the Indian rupee during the year up to April.