Inflows cushion current account in balance of payments: CB

Thursday, 13 September 2012 02:40 - - {{hitsCtrl.values.hits}}

The Central Bank yesterday said earnings from tourism and workers’ remittances continued to hold up, cushioning the current account of the Balance of Payments (BOP).

It said earnings from tourism in July 2012 grew by 23.6%, year-on-year, to $ 100 million, while during the first seven months of 2012, earnings from tourism have grown at a rate of 24.2%, year-on-year, to $ 560 million.

The number of tourists visiting Sri Lanka totalled 90,338 in July 2012, an increase of 7.8%, raising tourist arrivals during the first seven months of 2012 to 543,205. Workers’ remittances grew by 14.4%, year-on-year, to $ 475 million in July 2012, while cumulative inflows on account of workers’ remittances during the first seven months of 2012 increased by 17.0% to $ 3,417 million.

Foreign currency inflows to the financial market continued to strengthen the capital and financial account of the BOP during the first seven months of 2012.

Foreign investments at the Colombo Stock Exchange increased by $ 227 million, on a net basis, by end August 2012, while there has been a significant increase in foreign investments in Government securities, with net inflows to Treasury bills and Treasury bonds during the first eight months of 2012 amounting to $ 810 million.

Further, long-term inflows to the Government amounted to $ 2,169 million during the first seven months of 2012. In addition, long-term borrowings by commercial banks during January-August 2012 amounted to $ 927.5 million.

Meanwhile, Foreign Direct Investment (FDI) inflows, including foreign loans to BOI companies, of which data becomes available only quarterly, recorded an inflow of $ 452 million during the first six months of 2012 and more inflows are expected to materialise during the year.

Gross official reserves amounted to $ 7,099 million by end July 2012, while total international reserves, which include gross official reserves and foreign assets of commercial banks amounted to $ 8,744 million.