Foreign inflows buoyant: CB

The Central Bank said yesterday inflows to the services account of the balance of payments remain buoyant despite challenging conditions.

It said earnings from tourism in June 2012 grew by 20.6%, year-on-year, to $ 63 million, while during the first six months of 2012, earnings from tourism have grown at a robust rate of 24.3%, year-on-year, to $ 460 million. The number of tourists visiting Sri Lanka totalled 65,245 in June 2012, an increase of 21.6%, raising tourist arrivals during the first six months of 2012 to 452,867.

Workers’ remittances grew by 12.1%, year-on-year, to $ 452 million in June 2012, while cumulative inflows on account of workers’ remittances during the first six months of 2012 increased by 17.4% to $ 2,942 million.

Accordingly, net current transfers have continued to help buttress the current account of the balance of payments.

The Central Bank also said there have also been substantial foreign currency inflows to the capital and financial account of the balance of payments during the first half of 2012.

Foreign Direct Investment (FDI) inflows during the first six months of 2012 are estimated at $ 452 million. The BOI is confident that FDI inflows during the year 2012 as a whole would reach the targeted level of $ 2 billion.

Foreign investments at the Colombo Stock Exchange increased by $ 187 million, on a net basis, by end June 2012.

 In addition, long-term borrowings by commercial banks during January-June 2012 amounted to $ 927.5 million. A significant increase has also been seen in foreign investments in Government securities, with net inflows to Treasury bills and Treasury bonds during the first seven months of 2012 amounting to $ 842 million. Further, long-term inflows to the Government amounted to $ 1,084 million during the first six months of 2012.

Gross official reserves amounted to $6,045 million by end June 2012, while total international reserves, which include gross official reserves and foreign assets of commercial banks amounted to $ 7,415 million.

In terms of months of imports, gross official reserves were equivalent to 3.5 months of imports by end June 2012 while total reserves were equivalent to 4.3 months of imports. In the meantime, with the receipt of the ninth and final tranche of $ 414 million under the IMF-Stand-by Arrangement (SBA) facility, proceeds from the fifth international sovereign bond of $ 1 billion and other foreign inflows, gross official reserves are estimated to have risen to around $ 7.1 billion by end July 2012.

FT Quick Take

•     1H earnings from tourism up 24.3%

to $ 460 m

•     1H workers’ remittances up 17.4%

to $ 2,942 m

•     1H Foreign direct investment (FDI) inflows estimated at $ 452 m
•     1H net foreign investments at the Colombo Stock Exchange $ 187 m
•     1H long-term borrowings by

commercial banks $ 927.5 m

•     1H long-term inflows to the

Government $ 1,084 m

•     First seven months net inflows to Treasury bills and Treasury bonds $ 842 m
•     First seven months gross official reserves estimated at $ 7,100m
•     1H total international reserves $ 7,415 m