Official reserves climb to 6-year peak at US$ 7.2 bn; Gold in reserves doubles

​Sri Lanka’s foreign reserve assets have risen to their highest levels since April 2020, supported by continuous record-high inflows from worker remittances, tourism, and exports.

​According to data available through February 2026, the country’s foreign reserve assets reached US$ 7,284 million. This total includes a Chinese Yuan-denominated swap arrangement equivalent to roughly US$ 1.5 billion from the People’s Bank of China, which Sri Lanka entered into in 2021.

​The current reserve levels mark a significant recovery milestone. The last time reserves were near this mark was at the end of April 2020, during the initial stages of the pandemic, when they stood at US$ 7,179.9 million. For context, before the pandemic began at the end of 2019, Sri Lanka’s reserves were valued at US$ 7,638.5 million.

​Another notable shift in the reserve composition is the near doubling of gold reserves, reflecting a broader change in global central bank behaviour. The value of gold in Sri Lanka’s total official reserves surged to US$ 200 million, up from US$ 109 million in January 2026.

​By increasing its gold holdings, Sri Lanka is actively participating in a rising global trend driven by de-dollarisation. Central banks worldwide are increasingly diversifying their portfolios and moving away from the US dollar due to geopolitical uncertainties, mounting US debt, and a growing reluctance to view US dollar-denominated assets, including US Treasuries, as the ultimate safe haven.

​This shift is heavily evident in macroeconomic data, where the US dollar’s share of global central bank foreign exchange reserves has steadily declined by over ten percentage points over the last decade, dropping from roughly 70 percent to near 58 percent today. In contrast, global institutions have been accumulating gold at a record pace. Last year, in 2025, official central bank gold reserves reportedly surpassed their collective holdings of US Treasuries for the first time in thirty years.

​While Sri Lanka is clearly moving in tandem with this global de-dollarisation and gold accumulation trend, its gold holdings still represent a relatively small fraction of its overall US$ 7.2 billion reserves. This indicates that while the Central Bank of Sri Lanka is strategically aligning with global diversification practices, it is scaling these moves proportionally during its current reserve-rebuilding phase rather than aggressively over-allocating.

​This global pivot towards gold aligns with soaring market prices. Investors and sovereign institutions alike, spooked by geopolitical events, have increasingly sought refuge in the precious metal. Gold prices have risen by about 20 percent so far this year, following a record 65 percent advance in 2025.

​Despite these positive developments in building reserves, external pressures pose ongoing risks. The current conflict in the Middle East could strain the country’s ability to build reserves if the situation becomes prolonged. For instance, it could reduce exports to the region and disrupt tourist arrivals from or transiting through the Middle East.

​Furthermore, a higher import bill, driven by prolonged high oil prices and elevated costs of other commodities, could weigh heavily on the Central Bank’s ability to accumulate dollars. The local currency, the Rupee, has also come under pressure recently. ​Rebuilding reserves to double-digit levels remains an imperative goal for Sri Lanka to both withstand future external shocks and ensure enough capacity to settle its foreign currency loan obligations.