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n May, the Central Bank continued to maintain a steady flow of foreign currency into the domestic exchange market, purchasing US$ 224.5 million from banks. This marked a notable decrease from April’s purchases, which had totaled more than double this amount.
After selling US$ 32.0 million back to the market, the Central Bank concluded May with a net acquisition of US$ 192.5 million in foreign exchange. This contrasts sharply with April, when net purchases amounted to US$ 419.5 million. Such month-to-month variations are normal and reflect differing market conditions and strategic considerations.
During May, the Sri Lankan rupee faced some depreciation pressure compared to April, primarily due to seasonal factors affecting tourism earnings. However, the country’s export revenues and remittances remained robust.
Up until May, the rupee had appreciated by 7.3% against the US dollar for the year, a slight reduction from the 9.0% appreciation recorded up to April. Year-to-date, the average exchange rate stood at 303.78 rupees per US dollar.
Throughout the year so far, the Central Bank has consistently absorbed more dollars than it has sold to banks, totaling an impressive US$ 1,812.4 million in net acquisitions from January to May. This averages out to around US$ 363 million per month.
These efforts have contributed to bolstering the country’s gross official reserves, which by the end of May had reached US$ 5,421 million, marking the highest level since December 2020 when Sri Lanka was actively managing its debt obligations.
