Sri Lanka foreign reserves move to US$3.2bn

Mar 10, 2008 (LBO) – Sri Lanka's foreign reserves had increased to 3.4 billion dollars by March 06 with the monetary authority collecting 366 million dollars since the beginning of the year, the central bank said. The Central Bank had been heavily intervening in the inter-bank foreign exchange market in a bid to keep the Sri Lanka rupee down against the US dollar after money printing was reduced and the rupee started to appreciate.

"The Gross Official Reserve position has increased substantially so far this year due to steady inflows of export proceeds and worker remittances, a part of which has been absorbed by the Central Bank," the monetary authority said Monday.

"Therefore, the recent build-up of reserves and BOP surplus indicate improved stability and resilience of the external sector in 2008, which is reflected in the appreciation of the Sri Lankan rupee."

Central Bank says the reserves, which were 3,434 million US dollars on March 06, are now enough to cover 3.6 months worth of imports.

By end 2006, Sri Lanka had reserves of 3,063 million dollars with a balance of payments surplus of 531 million dollars.

Sri Lanka lost reserves after April 2007 when the country went into a minor cur