Jan 20, 2010 (LBO) - Sri Lanka's foreign reserves reached 5,228 million US dollars by end November 2009, which was equal to 6.4 months of imports, the Central Bank said.
With the balances of the Asian Clearing Union, a regional settlement arrangement involving countries which do not have fully convertible currencies, reserves were at 5,308 million US dollars.
The Central Bank said foreign investors had pumped in 262 million US dollars to government Treasury bills and 1,068 million US dollars to Treasury bonds.
Foreign remittances from expatriate workers were up 14.7 percent to 3,035 million US dollars in the nine months to September.
Sri Lanka has a pegged exchange rate regime.
As a result foreign remittances and borrowings, which increase the spending power of the people are the key drivers of Sri Lanka's trade deficit, unless the Central Bank sterilizes the resulting rupee liquidity to lock up reserves. Source
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