By Anusha Ondaatjie
Aug. 12 (Bloomberg) -- Sri Lanka’s foreign reserves have risen to a record $5.8 billion due to higher aid and investment flows, according to the head of the central bank’s economic research department.
“We have recently been buying dollars in the market amid inflows to government projects and portfolio investments,” K.D. Ranasinghe said in a telephone interview today from the Central Bank of Sri Lanka in Colombo. “There will be a further build up in reserves with exports continuing to recover.”
Remittances by Sri Lankans working abroad are forecast to rise by as much as 14 percent in 2010 from a year earlier, helping boost reserves, Ranasinghe said. Sri Lanka’s exports rose 15.1 percent to $620 million in May, the fourth straight month of gains.
The end of almost three decades of civil war in May 2009 has restored investor confidence and attracted foreign funds to the South Asian island, helping make Colombo’s benchmark stock index the world’s best performer this year after Mongolia, according to Bloomberg data.
The International Monetary Fund on June 28 approved the release of about $408 million to Sri Lanka under a $2.45 billion aid package that’s also boosted the island’s reserves.
Ranasinghe said an IMF mission is currently in Sri Lanka to review its loan program and for annual Article 4 consultations.
“We have met our end-June targets,” Ranasinghe said, referring to goals set by the IMF for its aid package that include the level of reserves.
The country, a producer of tea and textiles, turned to the IMF last year after foreign-exchange reserves dropped to an eight-year low.
Sri Lanka plans to sell $1 billion of sovereign bonds overseas this year to build infrastructure and repay high-cost debt, the central bank said Aug. 3
To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net.
Last Updated: August 12, 2010 04:14 EDT
source - http://noir.bloomberg.com
No comments:
Post a Comment