Sri Lanka foreign reserves move towards US$8bn

July 26, 2011 (LBO) – Sri Lanka’s foreign reserves would be close to eight billion US dollars after proceeds from a billion dollar sovereign bond comes to the country, Central Bank Governor Nivard Cabraal said.

The balance is expected to be disbursed in two tranches after reviews in September and March. By end May Sri Lanka had 7,025.6 million dollars of foreign reserves. In June the Central Bank was a net buyer in forex markets. But in the first three weeks of July the central bank had sold dollars, according to available money supply data.

Officials had earlier said that a part of the bond proceeds will be used to settle high cost short term debt.

Cabraal said reserves would go close to 8.0 billion dollars even after debt settlement.

Sri Lanka would also complete its program with the International Monetary Fund and there were no plans to refuse tranches, Cabraal said. The IMF has disbursed 1.75 billion US dollars out of a total of 2.6 billion US dollars.