Monday Apr 20, 2026
Monday Apr 20, 2026
Monday, 20 April 2026 04:57 - - {{hitsCtrl.values.hits}}
Gross official reserve assets held by the Central Bank of Sri Lanka (CBSL) dipped 3.45% month-on-month (M-o-M) to $ 7.01 billion as of end-March 2026.
According to data released by the CBSL last Friday, foreign currency reserves fell 4% M-o-M to $ 6.79 billion in March, down from $ 7.06 billion in February, while gold holdings increased 11% M-o-M to $ 222 million in March from $ 200 million in February.
According to the CBSL, the short-term drain on reserves during the next 12 months is estimated at $ 2.14 billion, with $ 764 million within three months and $ 1.38 billion within the next 12 months.
The CBSL said the aggregate short and long positions in forwards and futures in foreign currencies vis-à-vis the domestic currency (including the forward leg of currency swaps) is estimated at $ 3.9 billion, with a major portion of swaps to be rolled over.
Last week, the International Monetary Fund (IMF) said that reserves, real GDP growth, and revenue mobilisation had outperformed expectations, and warned against prolonged shocks from the ongoing Mideast war.
The IMF said: “It is important for monetary policy to remain data-dependent and agile to safeguard price stability in the face of shocks. Central Bank independence should continue to be upheld, including by continuing to prohibit monetary financing of the Budget. Rebuilding foreign reserves while allowing for exchange rate flexibility is a necessity amid global uncertainty. Resolving non-performing loans, promoting sound credit growth, and addressing vulnerabilities in some small licenced finance companies will help safeguard financial stability.”
In March, CBSL Governor Dr. Nandalal Weerasinghe rejected the need for immediate import controls or capital flow restrictions to contain the economic challenges from the Middle East war.
The Governor said the CBSL would continue to operate under a flexible exchange rate regime within an inflation-targeting framework, where the currency is determined by demand and supply conditions and broader macroeconomic fundamentals. However, he said the CBSL would intervene to manage excess volatility but declined to comment on what the tolerance level would be.
