Sri Lanka official reserves at USD9.3Bn : Rupee depreciated by 5.0-pct by Aug 2018

Aug 28, 2018 (LBO) – The Central Bank of Sri Lanka said reflecting developments in the domestic and global foreign exchange markets, the Sri Lankan rupee depreciated by 5.0 percent during the year up to 27 August 2018 against the US dollar.

Furthermore, reflecting cross currency movements, the Sri Lankan rupee depreciated against the euro, the pound sterling, the Japanese yen and the Canadian dollar while appreciating against the Australian dollar and the Indian
rupee during this period, the Bank added.

The country’s gross official reserves as at end June 2018 were US dollars 9.3 billion.

The deficit in the trade account continued to expand in June 2018 in comparison to June 2017, driven by the
higher growth in imports. On a cumulative basis, the trade deficit expanded significantly during the first half of 2018 in comparison to the first half of 2017.

Earnings from merchandise exports surpassed US dollars 1 billion for the second time during the year to US dollars 1,024 million in June 2018, mainly driven by industrial exports.

Under industrial exports, earnings from textiles and garment exports increased significantly due to the higher demand from the EU and the USA while exports to nontraditional markets also increased.

Export earnings from petroleum products increased significantly in June 2018 due to the combined effect of higher export prices and volumes of bunker and aviation fuel.

Export earnings from rubber products increased mainly due to higher earnings from tyre exports. Earnings from exports of machinery and mechanical appliances also increased notably during the month owing to the increase in earnings from electrical machinery and equipment and electronic equipment exports.

Meanwhile, export of base metals and articles increased due to higher exports of iron and steel articles and aluminium articles.

However, earnings from transport equipment exports declined significantly mainly due to the effect of higher earnings recorded in June 2017.

Expenditure on merchandise imports increased to US dollars 1,819 million in June 2018 mainly due to high
expenditure incurred on fuel, vehicles and transport equipment.

Expenditure on fuel imports, categorised under intermediate goods, increased considerably during the month owing to higher import prices and volumes of crude oil and refined petroleum products.

In addition, expenditure on textiles and textile articles imports increased in June 2018 reflecting higher expenses on all sub categories, particularly fabric and yarn imports.