Considering the severity of the external shocks and continued disruptions to domestic economic activity, the Monetary Board was of the view that a comprehensive policy package containing both traditional and non-traditional measures, along with other initiatives that have an impact on the overall economy, is essential to counter such economic headwinds.

Accordingly, after carefully considering the current and expected macroeconomic developments both globally and domestically, the Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 03 March 2022, decided to reinforce its stance adopted in January 2022, and decided to:

Manufacturing PMI improved in January 2022 recording an index value of 58.7 with an increase of 0.6 index points compared to December 2021. This was mainly attributable to the improvements recorded in New Orders, Production together with the recovery in Employment during the month. Further, Stock of Purchases increased while Suppliers’ Delivery Time lengthened on a month-on-month basis. 

The expansion in New Orders, Production and Stock of Purchases, particularly in the manufacture of textile & wearing apparel and food & beverage sectors, have mainly contributed to the improvement in the PMI. Although Employment sub-index recovered to positive territory in January 2022, employment sub-index with respect to the manufacture of textile & wearing apparel sector continued to decline, reflecting the difficulty in attracting employees to the sector. Meanwhile, the Stock of Purchases increased in line with the expansion in New Orders and Production.

The deficit in the trade account widened in December 2021 compared to a year earlier, mainly due to excessive surge in imports recording the highest ever monthly import expenditure, despite persistently high earnings from exports that exceeded US dollars 1.0 billion for the seventh consecutive month. During the year 2021, the trade deficit widened notably, driven by considerable increase in imports that outpaced the growth in exports. Tourist arrivals continued the growth momentum in December with a notable increase over the previous month. Meanwhile, workers’ remittances recorded a month-on-month growth in December 2021, mainly reflecting the response to incentive scheme introduced for remittances and the seasonal increase. The weighted average spot exchange rate in the interbank market continued to hover around Rs. 201 per US dollar during the month.

The Central Bank of Sri Lanka (CBSL) is currently taking steps to increase the inflows of foreign remittances to Sri Lanka as well as encourage the use of formal remittance channels when sending remittances to the country. Accordingly, the Central Bank of Sri Lanka initiated a National Remittance Mobile Application branded as “Lanka Remit”. It has been introduced and developed by LankaClear (Pvt) Ltd.

The National Remittance Mobile Application “Lanka Remit” was launched on 8th February by the Hon. Minister Namal Rajapaksa, Minister of Youth and Sports, Minister of Development Coordination and Monitoring and State Minister of Digital Technology and Enterprise Development of Sri Lanka.