Public Finance Data and Analysis
Free and Open Access to
In March, Sri Lanka's Central Bank reported its highest gross official reserve assets in over three years, reaching US$ 4,951 million, up from US$ 4,520 million the previous month. This recovery was driven by increased inflows from remittances and tourism, both returning to pre-pandemic levels in a largely stabilized economy. The country had endured a series of crises from 2019's Easter attacks through the pandemic and into an economic crisis sparked by a foreign currency shortage in 2022 and 2023, resulting in a severe currency crisis and inflationary spiral. With remittances and tourism recovering—generating around US$ 12.5 billion annually—aided by the suspension of most foreign currency debt, authorities have been able to rebuild reserves from near-zero levels in 2022. The last time reserves surpassed current levels was in December 2020, amidst the pandemic. However, challenges persist, including concerns from exporters over the rupee's appreciation by 20 percent since the end of 2022, which could impact their competitiveness globally. Despite this, continued foreign inflows and a debt standstill since April 2022 have bolstered the external sector, providing a measure of stability to the economy.
