With the receipt of the SAARC Finance swap facility of US dollars 400 million from the Reserve Bank of India, the level of gross official reserves increased to US dollars 7.1 billion as at end July2020, which was sufficient to cover 4.8 months of imports.
Total foreign assets, which consist of gross official reserves and foreign assets of the banking sector, amounted to US dollars 10 billion at end July 2020, providing an import cover of 6.8months. The Sri Lankan rupee, which continued to appreciate in mid-April 2020, maintained the momentum during July 2020 as well and recorded a marginal appreciation of 0.3% during the month.
The sharp appreciation of the rupee against the US dollar since mid-April led to limit the overall depreciation of the rupee thus far during the year up to September 14, 2020 to 1.6%. The Central Bank continued to intervene in the domestic foreign exchange market with a view to building up the level of gross official reserves. During the year up to end August 2020, the Central Bank absorbed US dollars 200.4 million, on a net basis. Meanwhile, workers’ remittances continued to increase, recording a growth of 12.2% in July 2020, year-on-year, to US dollars 702 million. A substantial increase was observed in workers’ remittances in July 2020, recording the highest amount of monthly remittances since January 2018.
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