External reserves inch up in October as Sri Lanka recovers from worst currency crisis 

Sri Lanka ended October with slightly higher foreign currency reserves of US$ 3,569.0 million from US$ 3,540.0 million in September, continuing the slow but gradual momentum in rebuilding reserves from the depths they fell in March last year causing the worst economic crisis the country has ever seen. 
Sri Lanka’s external account has also shown tentative signs of improvement as the balance of payment (BoP) in first 10 months recorded a surplus of little under US$ 2.0 billion from a deficit of US$ 2.9 billion in the same period in 2022.

Meanwhile, the Central Bank bought US$ 108 million from the local foreign currency market in October, increasing from the US$ 83 million it absorbed in September.
Sri Lanka’s external reserves carry US$ 1.3 billion equivalent Yuan denominated swap facility from December 2021, which has limitations on its usability.
Sri Lanka has also reached an agreement with the Paris Club group of creditors and India last week, paving the way for the approval of the first review of Sri Lanka’s International Monetary Fund (IMF) supported programme, making possible the release of the second tranche of US$ 334 million under the Extended Fund Facility. 
This is expected to follow a slew of other inflows from multilateral lenders such as the World Bank and the Asian Development, including allocations for direct budget support, further bolstering the external reserves position. 

President Ranil Wickremesinghe is currently in Dubai for COP28, the annual United Nations Climate summit, delivering speeches both at the summit and on its sidelines. His focus is on highlighting the significance of and Sri Lanka’s commitment to a swifter transition toward a greener economy. 
This appears to be an effort to persuade wealthier nations to invest in the crisis-stricken country, where at least one-third of the population experienced hunger last year.
A significant development at this year’s summit involves South Africa and Indonesia, two of the most coal-dependent economies, backtracking on their commitments to reduce fossil fuel consumption. 

They cite concerns about the economic and technical challenges of swiftly transitioning away from fossil fuels. Additionally, they express dissatisfaction with the financial support from wealthier nations, which is predominantly in the form of loans rather than grants, exacerbating their indebtedness.
Indonesia’s President, Joko Widodo last month said that climate funding should be more constructive and that it should not be in the form of debt which will only increase the burden on undeveloped and developing countries.