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Last Updated : 2024-04-23 22:35:00
Sri Lanka’s remaining foreign liabilities for the remainder of the year is estimated at just US$ 8.0 million, assuaging unfounded fears over the risks pertaining to the country’s foreign currency debt obligations and the broader external sector.
According to official data, the Central Bank settled foreign currency obligations worth of US$ 580 million last month to bring the remainder for the year to US$ 8.0 million or just under Rs.1.5 billion in rupee equivalent for 2020.
It is a significant feat on the part of the Treasury and the Central Bank to settle the country’s foreign liabilities in a tumultuous 2020 without extensively sacrificing its foreign reserves.
By end-November Sri Lanka had US$ 5.5 billion worth of foreign reserves buffer sufficient for covering four months of imports.
By end-2019, Sri Lanka had a reserve buffer of US$ 7.6 billion.
Sri Lanka has US$ 4.7 billion worth of foreign liabilities falling due in 2021 with a billion dollar sovereign bond maturing in July.
State Minister of Money, Capital Markets and State Enterprise Reform, Ajith Nivard Cabraal has reiterated that the country doesn’t need go to the International Monetary Fund (IMF) and could rely on the expected positive performance in trade account, services incomes and foreign direct investments expected to the tune of US$ 2.5 billion.
A day after Cabraal made this statement, Browns Investments PLC, part of LOLC Group, announced its plans to commit US$ 450 million in a mixed development project coming up in the Colombo International Finance Centre located within the Colombo Port City.
Meanwhile, commenting on the development concerning the settlement of foreign currency obligations and the paltry amount that remains for this year, ICRA Lanka said they do not expect significant fluctuations in excess liquidity, “hence the money market may remain broadly stable”.
By December 16, Sri Lanka’s money market had an excess liquidity of Rs.234.3 billion with Central Bank liquidity to the government at Rs.641.51 billion.
Meanwhile, the forward exchange rates suggest that Sri Lankan rupee is not under pressure as they indicate a strengthening rupee against the dollar.
The one-month forward rate for a dollar was quoted at Rs.185.54 on December 11 compared to Rs.186.21 a week ago while the three-month forward, a more fitting gauge of the currency strength, was quoted at Rs.185.40 a dollar compared to Rs.186.20 a week ago.
Bernard Friday, 25 December 2020 03:28 PM
At this moment the Sri iLanka Rupee against the U.S.Dollar is 190.
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