September gross reserves tad higher at US $ 6.2bn

Sri Lanka ended September 2025 with gross reserve assets of US $ 6,243 million, a tad higher than a month earlier, which was at US $ 6,178 million.

The US $ 65 million increase in 30 days came on the back of continued purchases of foreign currency by the Central Bank from the banking system.

For instance, in September, the Central Bank bought US $ 177.3 million, increasing from the US $ 142.5 million purchased in August. This brought the total net purchases of foreign currency from the banking system in the first nine months to an outsize US $ 1,415.9 million.

Despite continuous purchases by the Central Bank, which goes into rebuilding the Net International Reserves (NIRs) and Gross Officials Reserves, there has been some slowdown in 2025 compared to the speed that they could build reserves in 2024.

The Central Bank, under the commitment with the International Monetary Fund (IMF), has to purchase US $ 2,650.0 million in foreign currency from November 2024 and December 2025 and the Central Bank is already outperforming in the measure in the NIR accumulation.  

According to the agreement with the IMF, the Central Bank is required to purchase another net US $ 1,300 million in foreign currency in the first half of 2026.   

Although slightly higher reserves are seen so far in 2025, it has been tepid compared to a year ago and the Central Bank attributed that to the start of foreign currency debt repayments after the debt restructuring last year. Besides, the Central Bank also started to settle the US $ 2.6 billion swap line with the Reserve Bank of India while the government too started to settle some credit lines it has with India.

Further, the delay in receiving some project-related inflows from the multilateral funding agencies appears to have also led to the slow reserve building by the Central Bank.

The faster rise in the imports this year compared to last year, due to the reopening of the vehicle imports market and also the general increase in the imports with the expanding economy, appear to have also caused the reserve accumulation to slow this year.