The overall balance of payments recorded a surplus of US dollars 390 million by end-June 2008, said the Central Bank of Sri Lanka in a press release issued on August 15.

“Consequently, the gross official reserves increased to US dollars 3,433 million by end June, 2008, up from U.S. dollars 3,062.5 million in December 2007, which was sufficient to finance around 3.1 months of imports”, it said.

The cumulative earnings from exports during January-June, 2008 recorded an increase of 9.8 per cent and amounted to US dollars 3,888 million. Significant earnings from agricultural exports which increased by 34.6 per cent, year-on-year contributed to this increase.

The cumulative expenditure on imports during the first six months of 2008 amounted to US dollars 6,972 million; an increase of 35.6 per cent over the corresponding period last year.

These developments in external trade resulted in a deficit in the trade balance amounting to US dollars 504 million for June 2008. For the first six months of 2008, the deficit in the trade balance amounted to US dollars 3,084 million, compared to the deficit of US dollars 1,603 million for the corresponding period last year.

Private remittances during the period January-June 2008, which amounted to US dollars 1,460 million, and the higher capital and financial flows more than offset the deficit in the current account, as a result of which, the overall balance of payments recorded a surplus of US dollars 390 million by end-June 2008.