Foreign reserves dip into critical level

Sri Lankan foreign exchange reserves were down from USD 2.7 billion in September to USD 2.3 billion by the end of October as the Sri Lankan Central Bank paid US$ 492.9 million worth of foreign liabilities.

Current Sri Lankan foreign exchange reserves is sufficient for only 1.8 months of imports. But, Sri Lanka has US$ 1.5 billion equivalent swap line signed with China, which has saved Sri Lanka from disaster.

The Sri Lankan government recently tightened both goods and service exporters to rebuild reserves from non-debt creating inflows.

The pandemic affected the USD 4.5 bn Sri Lankan tourism and the current government’s corruptions and human right violations have caused panic among the investors.  Current political instability may wipe-out investors’ money.

Sri Lanka’s attempts to generate foreign money sale of State assets make disappointment for Sinhalese. The proposed sale of the coal power plant, Yugadhanawi causes panic among them.

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