CB assures SL will end 2021 with US $ 3bn foreign reserves

• But fails to divulge specifics on how reserves will be beefed up
• Says US $ 2bn SWAP expected from ME and other regional central banks 
• Assures with materialising of inflows, reserves position will remain at comfortable levels throughout 2022

The Central Bank yesterday reassured the public that Sri Lanka would end 2021 with foreign reserves over US $ 3 billion but without disclosing how such would be achieved. Sri Lanka’s foreign reserves fell to US $ 1.6 billion by the end of November, just enough to cover one month of imports. 

“The Central Bank of Sri Lanka wishes to inform the public that the measures being taken at present will ensure that by the end of 2021, the official reserves will remain above US $ 3 billion,” a Central Bank statement said.

“As articulated in the six-month road map, a number of foreign exchange inflows are envisaged in the very near term. Major foreign exchange inflows to the Central Bank include SWAP facilities with the Middle Eastern and other regional central banks, amounting to about US $ 2.0 billion,” it added.

The Central Bank further said the government is also in the process of securing government-to-government financing, syndicated loans as well as loans from multilateral organisations. 

“In addition, the expected foreign exchange facilities that were negotiated during the high-level visits abroad made by authorities are also progressing well,” the statement said. 

Meanwhile, the Central Bank said interventions made in the foreign domestic exchange market, incentives introduced to lure more remittances through the formal channels, higher migrant worker departures and significant growth in tourist arrival numbers, would help the country’s external sector recover in the period ahead. 

“The government and Central Bank remain confident that these expected inflows will materialise and the reserve position will remain at comfortable level throughout the year 2022,” the statement concluded.