Sri Lanka Central Bank buys US$579mn in August amid rupee appreciation
Sri Lanka’s Central Bank bought a net US$579 million in August, official data showed, amid a stabilizing local currency that touched a four-year low in the May this year.
It was the highest highest net absorption by the Central Bank from the domestic foreign exchange market since March 2024, the official data showed.
The Central Bank did not sell any dollars in August, after selling more than US$211 million in May on a net basis for the first time in 22 months.
The Central Bank has net bought US$1,484 million in the first eight months of 2026 following a net purchase of US$2 billion last year.
The rupee was under high downward pressure in May as the imports bill for fuel rose unusually high following the Middle Eastern escalation amid continued demand for dollars to buy new vehicles.
The Central Bank has been buying dollars aggressively from the market to boost foreign currency reserves to meet the targets the country agreed with the IMF under the US$3 billion external fund facility and to repay the island nation’s multilateral and bilateral loans.
The Central Bank’s aggressive reserve building comes ahead of the repayment of foreign debts to sovereign bond holders in April 2028.
