Sri Lanka’s gross foreign reserves increased by 474 million US dollars in October 2024, reaching a total of 6.4 billion dollars, according to data from the central bank. This rise comes as a result of the central bank’s monetary reserves and fiscal reserves sourced from loans, including a $200 million loan agreement with the World Bank signed in October, although it remains unclear if the funds were disbursed during the month.
For over two years, Sri Lanka’s central bank has implemented a deflationary policy that has contributed to balance of payments surpluses. Additionally, the central bank has allowed the rupee to appreciate, benefiting from the ongoing IMF program that has helped reverse some of the inflation experienced during the crisis.
Sri Lanka’s central bank has made significant progress, with net reserves, which were once negative by $4.6 billion at the height of the last currency crisis, now approaching zero by September 2024. The country has also repaid loans from both the International Monetary Fund and the Reserve Bank of India.
