Budget 2016 to help ease pressure on external sector: CB

Thursday, 26 November 2015 00:00 - - {{hitsCtrl.values.hits}}

The Central Bank this week said that the 2016 Budget would help ease the pressure on external sector performance of the country.

“Recent policy measures taken by the Central Bank and the Government coupled with policy measures announced in the Budget for 2016 are expected to curtail certain imports, particularly motor vehicles, thereby easing the pressure on the external sector,” the Central Bank said in its statement following the November Monetary Policy review.

It noted that the decline in expenditure on imports in September 2015 was greater than the decline in earnings from exports, narrowing the deficit in the trade account by 4.1% to $733 million. However, on a cumulative basis, the trade deficit widened during the first nine months of the year by 3.8% to $6,145 million, driven by the continued increase in non-oil imports.

The Central Bank also said earnings from tourism in the first 10 months of 2015 were estimated to have grown by 17.9%, strengthening the external current account, while workers’ remittances recorded a moderate growth of 1.8% in the first nine months of the year.

“Gross official reserves, which stood at $6.8 billion at end September 2015, are estimated to have strengthened to around $8.0 billion by 3 November 2015 with the receipts from the ninth International Sovereign Bond issuance for $ 1.5 billion,” the Central Bank said.

The Sri Lanka Rupee has depreciated by 8.1% against the US Dollar so far in 2015.