Saturday, July 25 2026
Saturday, July 25 2026
MONETABRIEF – Sri Lanka probably met the foreign reserve target in the International Monetary Fund program for June, but cannot confirm because data is not finalized, Central Bank Governor Nandalal Weerasinghe said.
Sri Lanka missed an IMF indicative target for Net International Reserves (gross reserve minus central bank borrowings), for March 2026, despite the target being reduced from 593 million dollars from the beginning of the year to 485 million.
"The June number we have to work out because we have to calculate NIR number.. after we finalize the balance sheet," Governor Weerasinghe told reporters.
"I think we have met the NIR target, but we can't confirm without looking at all the balance sheet finalization and the provisional numbers we have finalize."
Analysts had warned that under flexible inflation targeting Sri Lanka will miss reserve targets as private credit picked up as had happened repeatedly over the last decade as the statistical framework violates the classical economic price- specie-flow mechanism.
In the event, after the recent IMF double review, Sri Lanka's June reserve target was reduced by 1,727 million dollars to a negative 778 from positive 949 from the beginning of the year in the fourth review.
The end 2025 NIR was 3,105 million dollars.
Sri Lanka's published gross reserve which includes fiscal balances, fell by 388 million dollars to 6,450 million dollars by June 2026 from December 2025.
However, the central bank had bought from the market at least around 544 million dollars. Any settlement of central bank liabilities such as to India or to the IMF for loans taken during currency crises triggered by previous rate cuts, counts for the NIR number.
The central bank prints money when it buys dollars (it pegs the exchange rate and monetizes the balance of payments) which will lead to depreciation unless the new liquidity is extinguished permanently denying banks the opportunity to create credit and imports.
To prevent the central bank an opportunity to create money and trigger monetary instability there are now calls for the Treasury to purchase dollars. Dollars purchased by the Treasury are 'safeguarded' as there is no change in reserve money and there is no further depreciation and instability. (Colombo/July23/2026)
| US Dollar | 340.98 | Sell - |
| Euro | 391.44 | Sell - |
| Japan Yen | 2.114 | Sell - |
| Sterling | 458.31 | Sell - |
| AED | 91.58 | Indi - |
| 3 month bill | 9.95 | 0.18 ▼ |
| 12-m bill | 10.20% | 0 - |
| Gold | $4035 | - - |
| ASPI | 21,199.37 | 49.8 ▲ |
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