Govt’s sound economic policy pays dividends:

Central Bank Reserves cross US $ 9 billion mark

by Uditha Kumarasinghe

The Gross Official Reserves of the Central Bank of Sri Lanka crossed the US$ 9 billion mark on August 8, 2014 for the first time in the country’s history, Central Bank sources told the Sunday Observer yesterday.

According to the sources, Sri Lanka’s gross official reserves by end May 2014 amounted to US$ 8.8 billion, equivalent to 5.9 months of imports, while total foreign assets which include foreign assets of the banking sector amounted to US$ 10.2 billion.

Sri Lanka aims to increase its gross reserves to US$ 10 billion by end-2014.

The Gross Official Reserves reaching US$ 9 billion is a sign of stability of the Sri Lankan economy.

This was the first time that Sri Lanka reached this target due to the sound economic policies of the Government, the sources said.

The sources said the increase in Foreign Direct Investment (FDI) inflows, foreign exchange earnings and exchange inflows in the corporate and Government sector had paved the way for the Gross Official Reserves of the Central Bank to reach this unprecedented level.Sri Lanka’s economic growth has been one of the fastest among Asia’s developing economies in recent years.

In addition, the short-term outlook appears broadly positive as Sri Lanka is well positioned to benefit from the global economic recovery and particularly stronger growth in advanced economies.

Sri Lanka’s economy rebounded strongly in 2013 with an annual real GDP growth of 7.3 percent while inflation remained at a single digit for the fifth consecutive year. The country’s financial sector remained resilient, facilitating the investment and financial needs to support the growth momentum of the economy, the sources said.