Jan 03, 2013 (LBO) – Sri Lanka will not accumulate too much foreign reserves, but will maintain an amount that is comfortable for the economy and a deal with the International Monetary Fund is also on the cards, Central Bank Governor Nivard Cabraal said. Sri Lanka would have collected with about 6.8 billion US dollars of foreign reserves by the end of 2012 which is equal to about 4.4 months of imports, estimates by the Central Bank showed.
“During the year our foreign reserve accumulation was prudent, not too excessive,” Cabraal said Wednesday.
“We did not want to go into a situation where we had 7 or 8 months of reserves. At the same time it was not too slow either.”
Cabraal said he was reminded about the story of Goldilocks and the three bears, where she was comfortable in the bed of baby bear.
“Sometimes it is not easy to find the exact level of comfort that is needed,” Cabraal said.
“I think we have got the right balance. Not too much, not too little. We will be looking at it carefully and moving on we will ensure that Goldilocks is comfortable.”
By end November 2012 Sri Lanka had 6.49 billion US dollars of reserves or about 4.1 months of reserves.
Sri Lanka’s reserves are above its monetary base of about 490 bi