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saturday, March 24, 2012 - 12.31 GMT
Foreign currency inflows exceed US$ 750 million so far this year


A substantial Increase in foreign currency inflows to the country exceeding US$ 750 million so far this year and the decrease in import demand are expected to stabilize the foreign exchange markets in the coming weeks, the Central Bank said.

Thel Bank said total foreign currency inflows to the country from various sources this year amounted to a total of US$ 763 million, of which a significant portion was absorbed by the Central Bank raising the gross official reserves of the country.

The inflows were from several sources, the Bank said listing that Colombo Stock Exchange (CSE) attracted US$ 164 million so far in 2012 and investments in several commercial banks amounted to about US$ 127 million.

Monday's issue of oversubscribed Sri Lanka Development Bonds (SLDBs) brought in another US$ 87 million exceeding the target of US$ 45 million while foreign investors made a net investment of US$ 385 in Treasury Bills and Bonds.

The Central Bank expects further foreign currency inflows in the next few weeks. These would include inflows as a result of several commercial banks raising funds abroad for their Tier 2 capital, and an initial investment of approximately US$ 73 million in a mega hotel project.

The Bank also said there are clear signs of deceleration in credit growth and import demand in response to the recent policy measures it implemented raising the interest rates and stopping Bank's intervention in rupee market.

"The increasing foreign currency inflows, and the easing of the import demand as stated above, are expected to stabilize the foreign exchange markets in the coming weeks," the Central Bank said.





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Last modified: March 24, 2012.

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