Sri Lanka trade deficit doubles in January

Mar 27, 2008 (LBO) – Sri Lanka's trade deficit doubled to 610.8 million US dollars in January as a surge in oil and capital goods imports outpaced gains from an agricultural commodity boom, government data showed. Sri Lanka has recorded a balance of payments surplus in the first two months of the as the central bank bought dollars to prevent a rise in the rupee amid tight monetary policy.

The rupee has traded around 107.50 to 107.80 this year.

Economic analysts say the country is now running a fairly tight peg with the US dollar with minimal controls on domestic interest rates and sharply lower volumes of debt monetization. Updated The trade deficit grew 104.6 percent with petroleum imports rocketing to 302.1 million dollars in January 2008 from just 54.2 million a year ago. But there were no crude oil shipments last January, the Central Bank said.

Industrial exports grew 5.7 percent to 397.2 million dollars, with the key apparel sector growing by only 4.0 percent to 230.2 million dollars.

Revenue from tea exports rose 46.0 percent to 90.8 million dollars in January as both prices and volumes rose.

Economic analysts say a global bubble is driving commodity, oil and metal pric