Foreign remittances keep Sri Lanka floating

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

Apr.12 (LBO) – Sri Lanka’s balance of payments (BOP) has recorded a US$142 million surplus for the three months to March, the Central Bank said Wednesday as it maintained key interest rates for the fourth straight month. The balance of payments is a record of the island’s total payments to foreign countries, including the cost of imports and the outflow of capital, along with the total receipts from abroad, including the export earnings and the inflow of capital.

Higher inflows of tsunami related aid and private remittances from countrymen residing overseas helped swell Sri Lanka’s BOP to record a US$501 million surplus in 2005.

Gross official reserves of the Central Bank have risen to US$2.8 billion (3.6 months of imports) by end March 2006, while the country’s total reserves have topped US$4.3 billion (5.8 months of imports) as at end February 2006, the bank said.

The bank did not give the absolute numbers for trade in the first three months of the year, but said the import bill exceeded export revenues due to a hefty petroleum bill.

The island’s trade deficit – the broadest measure of international trade – widened during the three month period, weighed down by hefty import bill, but higher in

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