‘SL’s foreign reserves rose to USD 2.7 billion in February’

By Hiram H. Senewiratne

Sri Lanka’s inflation fell rapidly up to March with the credit system externally anchored at a peg of around Rs 360/370 to the US dollar. However, from March 7th the peg turned ad- hoc after appreciating, following the lifting of a surrender rule, Central Bank Governor Dr. Nandalal Weerasinghe said.

“With these developments foreign reserves have risen to US $ 2.7 billion in the month of February, injecting about Rs 160 billion through the ad-hoc peg, Dr. Weerasinghe told the media at the monthly policy review meeting held at Central Bank Head Office in Colombo on Tuesday.

The Governor said that Sri Lanka has already used part of the IMF money to settle an Indian credit line extended after the country defaulted.

“In the past the Central Bank received IMF funds into its balance sheet to build reserves without distributing reserve money or triggering any liquidity shocks, Dr Weerasinghes said.

The Governor said that this time the government is the borrower and the country has signed a tri- partite agreement. But it is serviced through the Central Bank.