Deficit in trade account widens to US dollars 6.5 bn

The deficit in the trade account widened to US dollars 6,497.9 mn during the ten months ending October 2021 from US dollars 4,845.7 mn in the corresponding period of 2020, Central Bank’s Weekly Economic Indicators show.

” The export unit value index increased by 28.3 per cent (Y-o-Y) in October 2021 due to higher prices,” the report further said.

Following are some excerpts from the report.

During the period under review (18.12.2021 to 24.12.2021), crude oil prices showed an increasing trend. Prices increased mainly

due to higher drawdown in US crude oil inventories. Price increases were also supported by the signs that the worst effects of

Omicron variant might be less severe and more containable than previously feared, even as countries imposed travel restrictions on surging infection levels. Overall, both Brent and WTI prices increased by more than US dollars 4.50 per barrel, during the period.

Weekly AWPR for the week ending 24th December 2021 decreased by 01 bp to 8.26 per cent compared to the previous week.

The reserve money increased compared to the previous week mainly due to the increase in currency in circulation and increase in deposits held by the commercial banks with the Central Bank.

The total outstanding market liquidity was a deficit of Rs. 455.549 bn by the end of this week, compared to a deficit of Rs. 421.669 bn by the end of last week.

By 24th December 2021, the All Share Price Index (ASPI) increased by 2.70 per cent to 12,070.68 points and the S&P SL 20 Index increased by 0.004 per cent to 4,253.83 points, compared to the index values of last week.

During the period from January to September 2021, government revenue increased to Rs. 1,050.8 bn compared to Rs. 1,028.9 bn recorded in the corresponding period of 2020.

During the year up to 24th December 2021, the Sri Lankan rupee depreciated against the US dollar by 7.2 per cent. Given the cross currency exchange rate movements, the Sri Lankan rupee appreciated against the Japanese yen by 2.9 per cent and the Euro by 0.8 per cent while depreciating against the Indian rupee by 4.9 per cent and the pound sterling by 5.6 per cent during this period.

Earnings from exports increased by 22.1 per cent (Y-o-Y) to US dollars 10,133.9 mn during the ten months ending October 2021 as a result of increased earnings from exports of textiles and garments (20.8%), rubber products (33.6%) and machinery and mechanical appliances (54.9%). Import expenditure increased significantly by 26.5 per cent (Y-o-Y) to US dollars 16,631.8 mn during the ten months ending October 2021 largely due to higher imports of fuel (40.1%), textile and textile articles (31.2%) and machinery and equipment (27.8%).