The Central Bank (CB) on Tuesday issued a press release saying the country's total reserves as at end November 2008 stood at US$3,914 million, sufficient to finance 3.3 months of imports.
The CB statement further went on to say that the country's total external reserves include gross official reserves held by the CB and government and external reserves of domestic commercial banks. As already published, the CB said the gross official reserves as at end November 2008 stood at US$2,608 million which was sufficient to cover 2.2 months of imports.
However, the figures stated above in the press release contradict the CB's own Selected Weekly Economic Indicators released on 23 January 2009 by the Statistics Department and available on the CB website. According to page 10 of the CB's weekly economic indicators report, the gross official reserves for end November 2008 was US$2,029.8 million, not US$2,608 million as stated in the 27 January 2009 press release. Furthermore, the weekly economic indicator report states that by end November 2008, the gross official reserves were sufficient to finance 1.7 months of imports, not 2.2 months as stated in the 27 January press release.
The aim of the 27 January press release as stated by the CB was to clarify the incorrect data with respect to the country's foreign reserves, as published in recent media reports, as those are grossly misleading the public and business community. In the same statement, the CB added that despite the well known different between the country's total reserves and gross official reserves, some economic analysts contributing their view to certain weekend newspapers have mixed up those two reserve figures and provided a misleading analysis on external reserves, comparing the country's total reserves until end 2007 with gross official reserves at end November 2008. Principal researcher at the Point Pedro Institute of Development Dr. Muttukrishna Sarvananthan told The Sunday Times FT that in an article published by the paper two weeks ago, he made the point that the gross official reserves as at end November 2008 was 33.7% lower than at end December 2007.
In fact, the January 23, 2009 weekly economic indicators report supports the statement made by Dr. Sarvananthan as it shows that gross official reserves as at end November 2008 to be US$2,029.8 million and gross official reserves as at end December 2007 was Rs.3,062.5 million. (NG)