We are continuously reminded by the Central Bank Governor Ajit Nivard Cabraal that our foreign reserves are at a healthy level of US$7 billion. The total foreign currency assets, according to the Central Bank 2011 annual report, are Rs 775 billion – ie $7 billion – at the prevailing rate of exchange on 31/12/11. The [...]

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The Sundaytimes Sri Lanka

Foreign reserves are a myth

Sampath Silva (Sent by email)
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We are continuously reminded by the Central Bank Governor Ajit Nivard Cabraal that our foreign reserves are at a healthy level of US$7 billion.

The total foreign currency assets, according to the Central Bank 2011 annual report, are Rs 775 billion – ie $7 billion – at the prevailing rate of exchange on 31/12/11.

The total foreign currency liabilities which he never speaks about amounts to Rs 479 billion – ie $4.35 billion.
So we had only $2.65 billion on 31/12/11.

Our imports were in the region of $1.5 billion a month in 2011.

Thus in effect we have less than two months import cover. This is a very dangerous situation. Our exports are down and FDIs are well below target. How much longer can we go on like this?




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