Sri Lanka’s Central Bank says that with the receipt of recent inflows, the official reserves position has now reached around US dollars 3.1 billion, and is expected to remain at such level by end of 2021.
Releasing a statement, the Central Bank said that the foreign currency inflows in connection with several other facilities that are under negotiation at present are expected to be realised in the early part of January 2022.
Accordingly, the Government and the Central Bank are confident that the reserve position will remain at comfortable levels throughout the year 2022.
“In this background, it is unfortunate that the hasty and inexplicable decisions of certain rating agencies to downgrade the Sovereign, even in the face of clear reassurances of impending forex inflows had caused unnecessary losses in the secondary market to investors in International Sovereign Bonds issued by the Government of Sri Lanka,” the statement said.
“Such rating actions also weighed negatively on investor confidence, resulting in undue delays in certain expected foreign currency inflows which may have materialised earlier, if not for such unwarranted and questionable rating actions.”
According to the Central Bank, the recovery in the tourism sector and the strong performance in exports are buttressing the external sector. Introduction of incentive schemes for workers’ remittances, and the rules covering the repatriation and conversion of exports proceeds are also augmenting official reserves.