Sri Lanka forex reserves up US$471mn in April after China loan

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Sri Lanka’s forex reserves grew 471 million US dollars in April 2021 to 4,476 million US dollars from 4,055 million dollars in March, central bank data showed.

In April Sri Lanka got a 500 million US dollar loan from China Development Bank.

Sri Lanka has also got a 1.5 billion US dollar swap from the People’s Bank of China, which was not drawn down.

In March the central bank bought about 75 million US dollars using a surrender requirement though rupee’s soft-peg with the US dollar was under pressure (weak side convertibility) due to excess liquidity.

Over the past four week Sri Lanka has not printed money but excess liquidity remains in the banking system.

Authorities have set up non-credible peg at around 200 to the US dollar.

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