Balance of Payments (BOP), which includes all foreign currency inflows and outflows, recorded a surplus of US dollars 1,006 million by end July 2011, the Central Bank said.

“The improved macroeconomic environment and several initiatives to attract foreign inflows contributed towards strengthening the country’s external reserve position to this level, a release from the Economic Research Department of the Central Bank said yesterday (29).

During the first seven months of 2011, the cumulative earnings from exports and expenditure on imports increased by 30.3 per cent to US dollars 6,014 million and 48.3 per cent to US dollars 11,091 million, respectively. The increase in imports expenditure was spurred by the increase in imports of intermediate goods and investment goods, such as machinery and equipment and building materials, which set a satisfactory foundation for future growth, the Bank reported.

Supported by the healthy growth in the tourism sector, the surplus in the services account increased to US dollars 461 million in the first seven months of 2011, while cumulative inflows on account of workers’ remittances amounted to US dollars 2,922 million during the same period.

At the same time, the total foreign inflows to the government (including the 10-year Sovereign Bond proceeds of US dollars 1 billion) during the first seven months amounting to US dollars 2,754 million and foreign direct investments (FDI) in the first half of 2011 amounting to US dollars 413 million, enabled the overall BOP to record a comfortable surplus of US dollars 1,006 million by end July 2011.

In the meantime, the exchange control relaxations effected by the Central Bank in November 2010 facilitated foreign exchange transactions and business activities during the past few months.

The relaxation measures which enabled corporates to borrow from foreign sources resulted in 14 private companies obtaining foreign loans amounting to US dollars 197.1 million by mid-September 2011, while the permission granted for foreign companies to open places of business resulted in 20 new foreign companies commencing business in Sri Lanka this year, the Bank said.

For full report please visit:

http://www.cbsl.gov.lk/pics_n_docs/latest_news/press_20110929e.pdf