August reserves only tad higher from July

BY Mirror business desk

The Central Bank has also continued its foreign currency collection binge so far this year and in the most recent period, they have collected a higher amount of foreign currency from the domestic foreign currency market, helping to rebuild its reserves
Official reserve assets of the Central Bank rose by just US $ 19.0 million in August 2025 to US $ 6,166.0 million inching Sri Lanka closer to achieving the US $ 7.0 billion reserve target by the close of 2025.  
Under the current programme with the International Monetary Fund (IMF), Sri Lanka is required to bring its gross official reserves to US $ 7.0 billion after outperforming the target in 2024 when Sri Lanka ended with US $ 6,091 million in reserves when the target under the IMF program was to have US $ 5.6 billion.   The Central Bank Governor, Dr. Nandalal Weerasinghe said he is confident of bringing the reserves up to US $ 7.0 billion or higher by the end of 2025 despite higher than anticipated outflows, especially for imports as vehicle imports were fully re-opened.  
This is amid Sri Lanka already servicing its debt to multilateral partners while the interest payments have already started for bilateral and commercial debt despite the capital repayments for the latter two beginning only from 2028 onwards.  
Even then, Sri Lanka’s debt servicing cost is estimated to go up by only US $ 1.0 billion, and hence it isn’t expected to break the external sector when the capital repayments on bi-lateral and commercial debt repayments kick in from 2028, according to Arutha Research Director for Debt Research Umesh Moramudali.  
Speaking at a forum held last week, Moramudali was quoted having brushed aside unfounded concerns by many so-called other Colombo based think tanks and some dogmatic news websites of a looming debt cliff, come 2028.  
Echoing Muramudali’s remarks, Standard Chartered Research in a Credit Alert issued on August 26 said Sri Lanka is projected to outperform its growth targets and achieve its revenue targets in 2026 and 2027, triggering optimistic scenarios for its newly issued macro and governance linked bonds with the latter getting a 75 basis points coupon reduction, helping the country to bring its debt servicing burden further down.