US$361mn outflow from government securities in first 3 months, CSE cumulative outflow US$28mn

June, 3, 2020

A net outflow of the foreign investment amounting to US $ 261 million was recorded from the rupee denominated government securities market in March 2020, resulting in a cumulative net outflow of US $ 361 million during the first three months of 2020, the Central Bank said.

Outflows of foreign investments from bond markets of most emerging and frontier economies were observed in the aftermath of the COVID-19 pandemic. However, Sri Lanka’s exposure to such outflows remains negligible, with only an insignificant share of outstanding government securities being held by non-residents.

Foreign investment in the CSE, of which only secondary market transactions were available for March 2020, recorded a net outflow of US $ 6 million. The CSE remained closed for trading from mid-March 2020 until mid -May 2020.

On a cumulative basis, the CSE recorded a net outflow of US $ 28 million in the first three months of 2020.

Gross inflows on account of long term loans to the government amounted to US $ 588 million in March 2020, which included the receipt of the syndicated loan facility from the China Development Bank amounting to US dollars 500 million.

Gross official reserves stood at US $ 7.5 billion at end March 2020, equivalent to 4.6 months of imports. Total foreign assets, which consist of gross official reserves and foreign assets of the banking sector amounted to US $ 10.7 billion at end March 2020, equivalent to 6.5 months of imports.