I ask you to be confident; ongoing negotiations will produce results soon: CBSL Governor

Governor of Sri Lanka’s Central Bank, Professor W D Lakshman requests people to be confident as ongoing negotiations with overseas agencies will produce results within one and a half months time.

Speaking to journalists in Colombo yesterday (12), the Governor emphasized that in spite of the doomsday predictions, they will continue to maintain the country’s unblemished record in debt repayments.

“There are a number of negotiations being going on with overseas agencies (the details of which I am not going to reveal) to raise some of the required foreign exchange inflows through swaps, loans and other sorts of mechanisms; negotiations with overseas central banks, banks, and other agencies, multilateral agencies included, though IMF is not there in the list yet,” Professor Lakshman said.

“There is the possibility of a couple of these negotiations producing results within a month or one and a half months time. That would be the trigger point in this confidence-building exercise. So, I ask you to be confident.”

Sri Lanka’s official reserves were 4.8 billion US dollars (USD 4,814.6mn) by the end of January 2021, down from 5.7 billion US dollars in December last year, the latest Central Bank data showed.

Central Bank Governor, however, pointed out that they have a deliberate policy of reducing debt-related inflows or debt creating investments.

“When there is excess foreign exchange liquidity in the market, there is a policy; the Central Bank purposely follows, purchasing that foreign exchange liquidity to add into the CBSL official reserves; this we have been doing several days over the last week,” he added.

Meanwhile, during the year up to 12 February 2021, the Sri Lankan rupee has depreciated against the US dollar by 4.2 percent.