Sri Lanka’s gross official reserves (GOR) reached USD 5 billion by the end of March 2024, marking a significant rise from USD 4.4 billion at the close of 2023.
In its report on External Sector Performance for March, the Central Bank of Sri Lanka (CBSL) attributed this surge in GOR to substantial net purchases of foreign exchange from the domestic market. Net intervention in March amounted to USD 715 million, and for the first quarter of 2024, net purchases totaled USD 1.2 billion.
The import coverage of GOR, which includes a swap facility from the People’s Bank of China valued at approximately USD 1.5 billion, has remained above 3 months of imports since December 2023.
The CBSL notes that the merchandise trade deficit narrowed to USD 369 million in March 2024 from USD 412 million in March 2023, primarily due to a more significant increase in exports compared to imports. However, this deficit widened compared to February 2024 (USD 319 million).
However, the cumulative trade deficit for January to March 2024 was higher at USD 1,229 million compared to USD 896 million for the same period in 2023.
Earnings from merchandise exports rose by 9.8% to USD 1,139 million in March 2024 compared to USD 1,037 million in March 2023. The CBSL noted an increase in earnings across all major export categories, with industrial exports experiencing the most significant growth.
The rise in industrial goods exports in March 2024 (year-on-year) was primarily driven by petroleum products due to increased volumes of bunkering and aviation fuel exports. Textiles and garments exports also saw notable improvements.
