Sri Lanka is turning to China and India for a financial lifeline as a balance of payment crisis looms over the island with revenue dwindling and the debt crisis rising.
The reserve money increased compared to the previous week mainly due to the increase in currency in circulation and deposits held by the commercial banks with the Central Bank.
The total outstanding market liquidity was a surplus of LKR 121.400 billion by the end of last week compared to a surplus of LKR 222.449 billion by the end of the previous week, the Central Bank announced.
As of late December, there had been net capital outflows of around USD 540 million (0.7% of GDP) since mid February, mostly from the treasury securities market.
No tourist arrivals have been recorded since April to 27th December due to the termination of all passenger flight and ship arrivals into Sri Lanka from 18th March.
Following a nine-month-long travel ban imposed due to the pandemic situation, 393 tourists from Ukraine arrived in the island in a series of charters under a pilot project starting from 28th December, the Tourism Development Authority said.
The gross official reserves were estimated at USD 5,665.1 million as at 31st December 2020.
Foreign remittances have recorded an increase to USD 812.7 million in December 2020 compared to USD 665 million in December 2019.
The reserve money increased compared to the previous week mainly due to the increase in currency in circulation and deposits held by the commercial banks with the Central Bank.
The total outstanding market liquidity was a surplus of LKR 121.400 billion by the end of this week, compared to a surplus of LKR 222.449 billion by the end of last week.
During the year up to 22nd January 2021, the Sri Lankan rupee depreciated against the US dollar by 5.1%. Given the cross currency exchange rate movements, it has also depreciated by around 3.8% against the US dollar since late December.
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