Saturday, 13 February 2021 21:27

Sri Lanka faces a threat of rapid foreign currency out flows Featured

Sri Lanka is facing a threat of rapid foreign currency out flows exerting pressure on the country’s foreign reserves, official sources said.

Total outflow from Govt. securities reach US$ 553 million and the exposure of rupee denominated market only $37 million while CSE records $ 225 million outflow from both primary and secondary markets

Gross inflows to the Government in 2020 dropped from $ 6.5 billion to little over $ 2 billion in 2020, the Central Bank said in its External Performance Report for last year.

Foreign investment in the government securities market recorded a marginal net outflow during the month.

A net outflow of foreign investment amounting to $ 10 million was recorded in the rupee denominated government securities market in December 2020, increasing the cumulative net outflow to $ 553 million during 2020.

The total outstanding exposure of foreign investment in the rupee denominated government securities market remained low at $ 37 million by end December 2020.

There were net outflows of $ 16 million from the secondary market of the CSE in December 2020. On a cumulative basis, the CSE recorded a net outflow of $ 225 million, from both primary and secondary markets, during 2020.

Meanwhile, long-term loans to the Government recorded a net outflow of $ 9 million in December 2020.

 

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