Reserves, FIs in Govt Securities Continue to Wallow
By Paneetha Ameresekere
The country’s foreign reserves continued to wallow in 12 year lows, with reserves falling by 10.12 per cent (US$ 452.6 million) last month (May) over April to $ 4,018.1 million led by the country’s foreign debt servicing commitments, Central Bank of Sri Lanka’s (CBSL’s) data of Friday showed.
Complementing these negative developments, foreign investments (FIs) in Government Securities (Treasury (T) Bonds and T Bills) continued to wallow in 13-year lows with such investments declining by 22.08 per cent (Rs 1,004.03 million) to Rs 3,542.52 million, week on week to Wednesday (9 June) due to seeming, perennial, uncertainty.
The country’s foreign reserves and foreign investments have fallen into lows last seen during the height of the war against LTTE terrorist which was concluded on 18 May 2009. Meanwhile, on a net basis, CBSL, last month expended $ 3.57 million from the country’s foreign reserves to aid US dollar deficit banks to meet the aforesaid net foreign outflows at an inflated rate of Rs 200.25 to the US dollar, which is the current administered rate of the ‘spot.’ ‘Spot’ trades are settled after two market days from the date of transaction. CBSL and foreign trades in the Government Securities Market are executed in ‘spot.’ CBSL is the steward of the country’s foreign reserves and of its debt.