Inflows to financial account continue

Monday, 28 August 2017 00:04 - - {{hitsCtrl.values.hits}}

The Central Bank on Friday said, reflecting continuous investor confidence, inflows to the financial account in June continued the positive trend observed in the previous month.

Foreign investments in the government securities market recorded a net inflow of $ 97.6 million in June 2017. Consequently, total cumulative net outflows of government securities declined to $153 million for the first half of the year.

Further, foreign investments into the Colombo Stock Exchange (CSE) during the first half of the year recorded a net inflow of $ 229.3 million, including net inflows of $ 145.9 million and $ 83.4 million to the secondary and primary markets, respectively. Meanwhile, long-term loans to the Government, including the proceeds of the syndicated loan, recorded a net inflow of $ 493.3 million during the first half of 2017, compared to a net inflow of $ 98.3 million during the corresponding period of 2016.

International reserves and exchange rate movements

Sri Lanka’s gross official reserves increased to $ 7 billion by end June 2017 with the proceeds from the International Sovereign Bonds (ISB) issuance and the syndicated loan facility. The gross official reserves were equivalent to 4.1 months of imports, while total foreign assets at $ 9.1 billion were equivalent to 5.3 months of imports.

Exchange rate

The rupee recorded a modest depreciation of 2.0% against the US dollar from end 2016 up to 24 August 2017. Reflecting cross-currency movements, the rupee also depreciated against all other major currencies i.e. against the euro by 12.5%, the pound sterling by 5.9%, the Japanese yen by 8.1%, the Canadian dollar by 8.8%, the Australian dollar by 10.2% and the Indian rupee by 7.6%, during this period.