The external sector remained resilient with increased inflows from workers’ remittances and tourist earnings despite an expansion in the trade deficit in July 2024.
Workers’ Remittances Net: USD -23 million increased to USD 3,711 million in Jan-Jul 2024 compared to USD 3,364 million in the corresponding period in 2023. Monthly workers’ remittances exceeded US dollars 500 million for five consecutive months.
Tourist Earnings were estimated to be USD 1,885 million from January to July 2024 compared to USD 1,094 million from January to July 2023.
Total inflows to the services sector, excluding earnings from tourism, were estimated at US dollars 337 million in July 2024 in comparison to US dollars 311 million in July 2023. Services inflows to computer & IT/BPO-related services and the sea transport sector were the main contributors to the increase in inflows to the services sector excluding earnings from tourism in July 2024.
Foreign investments in the government securities market recorded a net outflow of US dollars 23 million in July 2024 resulting in a cumulative net outflow of US dollars 221 million during January-July 2024
Foreign flows to the CSE, including both primary and secondary market transactions, recorded a net inflow of US dollars 12 million in July 2024 and a cumulative net inflow of US dollars 32 million from January to July 2024.
The deficit in the merchandise trade account widened to US dollars 604 million in July 2024 from US dollars 367 million recorded in July 2023, driven by a relatively larger expansion in import expenditure.
Earnings from merchandise exports recorded an increase of 10.8 per cent (y-o-y) to US dollars 1,130 million in July 2024. The increase was broad-based with the major contribution from industrial exports.
Expenditure on merchandise imports recorded an increase of 25 per cent (y-o-y) to US dollars 1,734 million in July 2024.
The Sri Lanka rupee appreciated in August 2024, despite some occasional depreciation pressures. The Sri Lanka rupee appreciated by 7.9 per cent against the US dollar during the year up to 30 August 2024.
Meanwhile, reflecting cross-currency movements, the Sri Lanka rupee appreciated against other major currencies, such as the euro, the pound sterling, the Chinese yuan, the Japanese yen, the Indian rupee, and the Australian dollar during the year up to 30 August 2024.
Reserves move up to USD 5.7 Bn
Gross Official Reserves (GOR) stood at US dollars 5.7 billion at the end July 2024 compared to US dollars 4.4 billion at the end of December 2023.
This includes the swap facility from the People’s Bank of China (PBOC), which is subject to conditionality on usability.
Net purchases of foreign exchange from the domestic foreign exchange market by the Central Bank amounted to US dollars 121 million (based on trade date) in July 2024.
Meanwhile, import coverage of GOR (including the PBOC swap) amounted to 3.8 months of imports as of the end of July 2024.
