Fourth quarter 2021: Foreign debt servicing, ‘Essential’ imports, bleed reserves by $ 1.24B
By Paneetha Ameresekere
The country’s foreign reserves haemorrhaged by a total of US$ 910.43 million in the last quarter of last year to pay for ‘essential’ imports on a gross basis, Central Bank of Sri Lanka (CBSL) data of Friday showed.
Further, in the review period, the country’s foreign debt servicing costs would have had haemorrhaged the country’s foreign reserves by another US$ 330.09 million, increasing the bleeding of the country’s foreign reserves in the review quarter to $ 1,240.52 million ($ 1.24 billion) on a gross basis. This discounts foreign loans received by the Government as they have not been made public at the time of writing, if such is known that would elevate the Government’s debt servicing commitments by an equivalent amount.
These transactions were done at the administered and discounted ‘spot’ rate, ranging from a minimum of Rs 200 to a maximum of Rs 203 to the US dollar. However, in the black market, the dollar was trading at Rs 250 due to the scarcity of the greenback in the country.
Nonetheless, due to a China yuan swap, equivalent to US$ 1.5 billion, the country’s foreign reserves were uplifted by 16.02 per cent ($ 433.4 million) to US$ 3,137.6 million in the review period. Also in the review quarter, due to the mandated conversions of exports, US$ 173.92 million was accrued to the country’s foreign reserves, where, such conversions too are based on the above administered rates.
If, however, the yuan swap was discounted, the country’s foreign reserves would have had bled by 39.44 per cent (US$ 1,066.6 million) to US$ 1,637.6 million in the review quarter.