CB says considerable improvement in forex inflows in March

The Central Bank on Friday said that foreign exchange inflows continued to remain healthy during the past few weeks.

Reflecting this trend, the Bank said the exchange rate appreciated to around Rs. 128 per US dollar by 30th March from around Rs. 130 a week ago.

The Central Bank also absorbed a substantial part of such foreign exchange inflows, resulting in the gross official reserves increasing considerably during March 2012.

In the meantime, the month-to-month growth in import expenditure decelerated to 20% in January 2012 from 34% in December 2011. A further deceleration in import growth is expected in response to various policy measures introduced by the Central Bank and the Government in February and March 2012.

“At the same time, other foreign exchange inflows to different sectors of the economy are being realised as expected,” the Bank said.

In addition to funds already raised by commercial banks to strengthen their capital base, over $ 500 million of further investment is expected during the next few weeks.

Positive inflows to the equity market are continuing with the total net inflows to the Colombo Stock Exchange amounting to $ 164.2 million by 30th March. The inflows in respect of Treasury bills and bonds have also amounted to $ 400 million so far in 2012.