FINANCIAL CHRONICLE – In September, Sri Lanka’s Central Bank recorded a net purchase of US$64.2 million, according to official statistics, as the local currency faced depreciation pressures, hitting a four-year low in May of this year.
During September, the rupee experienced a decline of 0.9 percent, as reported by the Central Bank. The institution acquired US$85 million from the domestic foreign exchange market while simultaneously selling US$20.8 million within the same month.
Notably, in May, the Central Bank sold a net total of over US$211 million, marking the first significant net outflow in 22 months. Throughout the first nine months of 2026, the Central Bank has net purchased US$1,548.8 million, following a substantial net acquisition of US$2 billion in the previous year.
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The rupee faced substantial downward pressure in May due to a sharp increase in the fuel import bill, exacerbated by turmoil in the Middle East and ongoing demand for dollars to finance new vehicle purchases. However, the currency rebounded in the subsequent two months before declining again in September.
To bolster foreign currency reserves and fulfill commitments made with the International Monetary Fund (IMF) regarding the US$3 billion external funding facility, the Central Bank has been actively purchasing dollars from the market. This initiative is also aimed at ensuring the country can meet its multilateral and bilateral loan obligations.
The Central Bank’s proactive approach to increasing reserves is particularly pertinent as the country prepares for the repayment of foreign debts to sovereign bondholders, which is scheduled for April 2028. (Colombo/October 03/2026)
