External Sector Performance - August 2018

The external sector performance remained subdued in August 2018. During the month, the deficit in the trade account narrowed marginally compared to a year earlier as the rise in export income outpaced the growth in import expenditure. Meanwhile, other inflows to the current account continued to be modest in August 2018 with a marginal increase in earnings from tourism and a decline in workers’ remittances. On a net basis, the financial account of the Balance of Payments (BOP) recorded outflows during the month, due to withdrawals of foreign investments from both the government securities market and the Colombo Stock Exchange (CSE) and continued debt service payments. These developments, alongside the broad based strengthening of the US dollar, continued to exert pressure on the exchange rate to depreciate, thus necessitating intervention by the Central Bank in the domestic foreign exchange market to curtail undue excessive volatility in the exchange rate. As at end August 2018, gross official reserves amounted to US dollars 8.6 billion. 


Published Date: 

Monday, October 29, 2018