Sri Lanka sold Gold reserve to save Forex

Sri Lankan Central Bank sold US$ 206.8mn worth of more than half of its gold reserve last month to increase forex reserves that had dropped to less than $ 1.5 bn.

The Central Bank’s Weekly Economic Indicators showed that gold reserves went down from US$ 382mn to US$ 175mn in December. This amounts to around 3.6 tons of 6.69 tons of gold. It is left now with around 3 to 3.1 tons of gold.

“Sri Lanka sold gold in 2015, 2018 and 2019 but did not buy any back as reserves fell in line with liquidity injections,” the report said.

Meanwhile, Indian Medias reported last week that high street banks in India had “turned cautious and selective about their exposures to the Sri Lanka”.

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