Higher inflows cushion Balance of Payments

Tuesday, 30 October 2012 00:25 - - {{hitsCtrl.values.hits}}

The Central Bank said last week that higher inflows have helped to cushion the Balance of Payments (BOP) by end August.

Earnings from tourism in August 2012 grew by 16.4%, year-on-year, to $82 million, while during the first eight months of 2012, earnings from tourism have grown at a rate of 23.0%, year-on-year, to $642 million. The number of tourists visiting Sri Lanka totalled 79,456 in August 2012, an increase of 9.7%, raising tourist arrivals during the first eight months of 2012 to 622,661.

Workers’ remittances grew by 6.9%, year-on-year, to $490 million in August 2012, while cumulative inflows on account of workers’ remittances during the first eight months of 2012 increased by 15.6% to $3,907 million.

Foreign currency inflows to the financial market continued to strengthen the capital and financial account of the BOP during the first eight months of 2012.

Foreign investments at the Colombo Stock Exchange increased by $250 million, on a net basis, by end September 2012, while there has been a significant increase in foreign investments in Government securities, with net inflows to Treasury bills and Treasury bonds during the first nine months of 2012 amounting to $821 million.

Further, long-term loans to the Government during the first eight months of 2012 amounted to $2,292 million. In addition, long-term borrowings by commercial banks during January-September 2012 amounted to $927.5 million.

Inflows on account of Foreign Direct Investment (FDI), including foreign loans obtained by BOI companies, of which data become available only quarterly, amounted to $452 million for the first six months of 2012 and more inflows are expected to materialise during the year.

Gross official reserves amounted to $7,053 million by end August 2012, while total international reserves, which include gross official reserves and foreign assets of commercial banks amounted to $8,694 million.

In terms of months of imports, gross official reserves were equivalent to 4.3 months of imports by end August 2012 while total reserves were equivalent to 5.3 months of imports.