Reserves fall $525.30M in March
By Paneetha Ameresekere
Sri Lanka’s foreign reserves, led by the country’s foreign debt servicing commitments, fell by US$525.30 million (11.46 per cent), last month (March) over February (2021) to $ 4,057.70 million, Central Bank of Sri Lanka (CBSL) data, released on Friday showed. The country’s foreign reserves as at end February stood at a higher level of $ 4,583.70 million.
Last month’s fall was complemented by the country’s foreign currency holdings in the review period, declining by $ 507.30 million (12.30 per cent) to $ 3,618.20 million. The island’s foreign currency reserves as at last month end comprised 89.17 per cent of Sri Lanka’s total foreign reserves as at end March 2021. The country’s foreign currency reserves as at end February stood at $4,125.50 million.
CBSL last Sunday (4 April) said that, led by the country’s foreign debt servicing commitments, Sri Lanka’s foreign reserves bled by nearly $ 1,200 million from 1 January 2021 to 4 April 2021.
Meanwhile, a reserve value of $ 4,057.70 million as at last month end is the lowest the country’s foreign reserves have fallen into, after a lapse 12 years. At the end of March 2009, when Sri Lanka’s LTTE war had reached a climax, the country’s foreign reserves fell into a low $ 1,082 million figure.
But after obtaining a $2.5 billion IMF facility in July 2009, which created international investor confidence in the country, reserves by end December 2009 had swelled to $ 5,097 million.
Sri Lanka’s total foreign debt servicing commitments for the year (2021) is $ 4 billion. With $ 1.2 billion of that liability now repaid, Sri Lanka has still to meet a foreign debt servicing commitment of $ 2.8 billion by the year end. This yet to be met commitment of $2.8 billion worth of foreign debt servicing commitments, is equivalent to 69 per cent of the value of the country’s total foreign reserves as at last month end.
Since Sri Lanka opened up its economy in 1977 and since the following year (1978) after that, the island has been running continuous deficits in its balance of payments in the current account led by a perennial, negative trade balance. Sri Lanka, in January of this year, ran a trade deficit of $ 667.20 million, latest CBSL data showed.