$ 512 m net outflow from Govt. securities from Jan-Sept.

• CB says $ 9 m inflow into securities in Sept. but foreign investment still low
• $ 42 m outflow from CSE primary and secondary markets, $ 215 m outflow in first 9 months 
• Reserves at $ 6.7 b, rupee records 0.3% appreciation in Sept.

Cumulative net outflow of $ 512 million from rupee-denominated Government securities was observed in the first nine months of this year, the Central Bank said yesterday, but was slightly reduced by a $ 9 million investment in September. 

A net inflow of foreign investment amounting to $ 9 million was recorded from the rupee denominated government securities market in September 2020, reducing the cumulative net outflow to $ 512 million during the period from January to September 2020, the Central Bank said in its latest External Performance report for September.

The total outstanding exposure of foreign investment in the rupee-denominated Government securities market remained relatively negligible at $ 72 million by end September 2020.

There was a net outflow of $ 42 million from the primary and secondary markets of the CSE in September 2020. On a cumulative basis, the CSE recorded a net outflow of $ 215 million during the nine months ending September 2020.

Meanwhile, long-term loans to the Government recorded a net inflow of $ 50 million in August 2020 (data available only up to end August 2020).

The level of gross official reserves amounted to $ 6.7 billion at end September 2020, which was equivalent to 4.7 months of imports. Total foreign assets, which consist of gross official reserves and foreign assets of the banking sector, amounted to $ 9.2 billion at end September 2020, providing an import cover of 6.5 months.

The Sri Lankan Rupee recorded a marginal appreciation of 0.3% during September 2020, after demonstrating some volatility in the middle of the month. Overall, the rupee has recorded only a marginal depreciation of 1.5% against the US Dollar thus far during the year up to 6 November.

With a view to building up gross official reserves, the Central Bank continued to intervene in the domestic foreign exchange market by purchasing foreign exchange in September 2020 as well. During the year up to end October 2020, the Central Bank has absorbed $ 302.6 million, on a net basis.

Meanwhile, reflecting cross-currency movements, the Sri Lankan Rupee depreciated against the Euro, the Pound Sterling, the Japanese Yen and the Australian Dollar, while appreciating against the Indian Rupee in 2020 up to 6 November.