Official reserves position has now reached around US dollars 3.1 bn: Central Bank

Says several other facilities are expected to realise in early part of January 2022

Notes rating agencies jumped the gun when it downgraded the sovereign

The Central Bank of Sri Lanka yesterday said that expected foreign currency inflows were forthcoming and with the receipt of such inflows, the official reserves position has now reached around US dollars 3.1 billion.

“It is expected to remain at such level by end of 2021, as well. In addition, as articulated in the Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability, foreign currency inflows in connection with several other facilities that are under negotiation at present, are expected to be realised in the early part of January 2022,” the statement said.

The Central bank said that measures taken by it with a view to improving foreign exchange liquidity in the domestic market, by way of introducing incentive schemes for workers’ remittances, and the rules covering the repatriation and conversion of exports proceeds are also augmenting official reserves.

“The welcome robust recovery in the tourism sector and the strong performance in exports are further buttressing the external sector. Accordingly, the Government and the Central Bank are confident that the reserve position will remain at comfortable levels throughout the year 2022,” it noted.

“In this background, it is unfortunate that the hasty and inexplicable decisions of certain rating agencies to downgrade the Sovereign, even in the face of clear reassurances of impending forex inflows had caused unnecessary losses in the secondary market to investors in International Sovereign Bonds issued by the Government of Sri Lanka. Such rating actions also weighed negatively on investor confidence, resulting in undue delays in certain expected foreign currency inflows which may have materialised earlier, if not for such unwarranted and questionable rating actions,” the Central Bank said.