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SL’s Gross Official Reserves reach US$ 5 bn by March 2024, driven by forex purchases, export growth

May 02, Colombo (LNW): Sri Lanka’s gross official reserves (GOR) surged to US$ 5 billion by the end of March 2024, marking a substantial increase from USD 4.4 billion at the close of 2023, the Central Bank of Sri Lanka (CBSL) said.

The CBSL, in its report on External Sector Performance for March, attributed this growth in GOR to significant net purchases of foreign exchange from the domestic market, amounting to US$ 715 million in March alone and totaling US$ 1.2 billion in the first quarter of 2024.

Import coverage of GOR, bolstered by a swap facility from the People’s Bank of China worth around US$ 1.5 billion, has remained above 3 months of imports since December 2023.

Furthermore, the trade deficit narrowed to US$ 369 million in March 2024 from US$ 412 million a year earlier, driven by a notable increase in exports outpacing import growth.

However, this deficit widened compared to February 2024 (US$ 319 million).

Merchandise export earnings rose by 9.8 per cent year-on-year to US$ 1,139 million in March 2024, with notable increases observed across major export categories, particularly industrial exports.

Industrial goods exports saw a significant boost, primarily driven by petroleum products due to increased bunkering and aviation fuel exports.

Textiles and garments exports also showed notable improvement during this period.

Meanwhile, expenditure on merchandise imports increased by 4.0 per cent to US$ 1,508 million in March 2024 compared to the same period last year.

Expenditure across major import categories rose, with intermediate goods, particularly fuel imports, registering the highest increase.

Consumer goods imports rose due to increased expenditure on food and beverages, despite a decline in non-food consumer goods imports, mainly attributed to lower medical and pharmaceutical imports.

Investment goods imports saw a broad-based increase, propelled by higher imports of building materials and machinery and equipment.

March 2024 imports also surged compared to February 2024, primarily due to normalised fuel expenditure.

Regarding the tourism sector, earnings in March 2024 were estimated at US$ 338 million, while workers’ remittances amounted to US$ 572 million, indicating steady performance compared to previous months and the same period last year.

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