(LANKAPUVATH | COLOMBO) – The Central Bank of Sri Lanka Wednesday informed the general public that the official reserves position has now reached around US dollars 3.1 billion with the forthcoming foreign currency inflows and with the receipt of recent inflows.
The Central Bank in a statement said the foreign reserves are expected to remain at such level by end of 2021, as well.
“In addition, as articulated in the Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability, foreign currency inflows in connection with several other facilities that are under negotiation at present, are expected to be realized in the early part of January 2022,” the statement further said.
The Central Bank said the measures taken by the Bank with a view to improve foreign exchange liquidity in the domestic market, such as introduction of incentive schemes for workers’ remittances, and the rules covering the repatriation and conversion of exports proceeds are also augmenting official reserves.
“The welcome robust recovery in the tourism sector and the strong performance in exports are further buttressing the external sector. Accordingly, the Government and the Central Bank are confident that the reserve position will remain at comfortable levels throughout the year 2022,” it said.
The Bank criticized the “hasty and inexplicable decisions” of global rating agencies for downgrading the sovereign rating, which according to the Bank weighed negatively on investor confidence.
“In this background, it is unfortunate that the hasty and inexplicable decisions of certain rating agencies to downgrade the Sovereign, even in the face of clear reassurances of impending forex inflows had caused unnecessary losses in the secondary market to investors in International Sovereign Bonds issued by the Government of Sri Lanka,” the Bank said.
“Such rating actions also weighed negatively on investor confidence, resulting in undue delays in certain expected foreign currency inflows which may have materialized earlier, if not for such unwarranted and questionable rating actions.”