Central Bank purchased $2 bn from the market in 2025
View(s):The Central Bank of Sri Lanka (CB) purchased a total of US$2 billion through the money market last year, contributing to the gross official reserves reaching $6.8 billion by end 2025, the highest level recorded in the post- economic crisis period.
Sri Lanka suffered an economic collapse in 2021-2022 exacerbated by an acute shortage of foreign exchange due to mismanagement.
The banking regulator said market purchases of foreign exchange in December 2025 was $250.8 million, slightly higher than $231.3 million recorded in the same month in 2024.
In its Market Operations report for December 2025, released in a statement on December 30, the banking regulator said the CB intervened in the domestic foreign exchange market to augment foreign reserves during opportune times, while curtailing excessive volatility in the exchange rate.
It said the Sri Lanka rupee recorded a modest depreciation against the US dollar over the year 2025. During the second half of 2025, the Sri Lanka rupee depreciated by 3.1 per cent against the US dollar compared to 2.5 per cent depreciation recorded in the first half of 2025. Accordingly, throughout the year, the Sri Lanka rupee depreciated by 5.6 per cent against the US dollar from Rs. 292.58 by end December 2024 to Rs. 309.99 by end December 2025 compared to the10.7 per cent appreciation recorded in 2024. This depreciation in 2025 reflected the impact of external developments, and geopolitical factors, alongside domestic foreign exchange market dynamics mainly driven by import related demand, amidst notable rise in motor vehicle imports, the release said.
Economic activities were temporarily disrupted during the latter part of the year due to extreme weather conditions arising from Cyclone Ditwah, which also influenced the dynamics of the domestic foreign exchange market. However, foreign exchange inflows due to increased workers’ remittances and export proceed conversions helped to curtail these pressures, resulting a modest overall depreciation of the Sri Lanka rupee, while enabling foreign exchange purchases of the CB.
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