Business
Central Bank eyeing USD 8 -10 billion currency reserves in 3-4 years
IMF has shown the way and now Sri Lanka has to dig itself out of the mess, says Governor
by Sanath Nanayakkare
Central Bank Governor Dr. Nandalal Weerasinghe recently said that Sri Lanka needs to build and keep a ‘comfortable level’ of currency reserves in order to maintain the country’s balance-of-payments situation in the event of any external shocks or unforeseeable emergencies.
The Governor made this comment during an interview with Sri Lanka Rupavahini Corporation’s Big Question’ programme.
“Foreign debt restructuring will be a key pillar in this exercise. Sri Lanka’s foreign loan repayments currently stand at USD 6 billion per year. If a part of these debt repayments can be restructured, that will give the country more space to secure the funds it needs to repay its loans and pay for its essential imports going forward. Say, for example, if it can be restructured to pay USD 2 billion per year, then the balance USD 4 billion will remain in our reserves. Thus we should be able to gradually increase our reserves within 3-4 years to build it up to USD 8-10 billion. If this could be achieved, it would be a relatively strong position because in case of an oil price shock or any other unforeseeable emergency, we would have enough reserves to face it. This is why bringing the currency reserves to a comfortable and safe level while repaying our foreign debt is important,” he said.
“The depletion of currency reserves was the main cause for going into the crisis last year. When I was appointed Governor of the Central Bank in April 2022, there was only USD 20 million usable reserves. Once we paid our loans, there was no money left in hand to import essential commodities. Those days we had to depend on daily inflows to tide us over. That’s not a good situation. For the economy to stabilize, we need to increase our reserves up to at least USD 8 billion,” he said.
According to the Governor, country’s currency reserves would reach close to USD 3 billion at the end of this month with the Chinese SWAP of USD 1.6 billion.
However, the Governor emphasized that there are two main pillars the country must prioritize in building foreign reserves before looking at foreign debt restructuring.
“We have to increase our export earnings by diversifying our exports and increase our expatriate workers’ remittances. Keeping our imports at a manageable level as against our exports is another key element. Thirdly, working proactively to increase our tourism earnings would help increase our reserves. These should be our prime targets. Yes, then as you mentioned, if we receive a loan from the IMF, the World Bank or the Asian Development Bank, that will also help boost our reserves. It’s important to methodically reduce the import expenditure and increase export earnings, then the surplus would add to our reserves.
When asked whether the IMF would really dig Sri Lanka out of the mess, the Governor said,” What is the need for IMF to dig Sri Lanka out of the mess? It’s not a problem of the IMF. The government now has to keep its pledges on fiscal discipline and fiscal consolidation and move ahead in the right direction with consistency, without veering away from the agreed upon benchmarks for political reasons. India, Korea, Thailand and Indonesia also went to IMF post- Asian financial crisis. They didn’t go to IMF again because they implemented the programmes and there was no need to go again. IMF gives its members’ money and that is why it took a long for them to give us money as our debt was unsustainable. They help member countries facing balance of payment issues with members’ funds and show them the way to stabilize themselves. So it is up to us to dig ourselves out of the mess,” the Governor said.
The Commercial Bank of Ceylon has transformed its iconic ‘Foreign Branch’ into the ‘Corporate Branch,’ reaffirming its commitment to delivering dedicated, comprehensive financial solutions to corporate and trade customers.
The Bank said this transformation represents a new milestone in its illustrious journey, and resonates with the rich commercial heritage of Colombo, a city that has long served as a vital trading hub in the region.
Strategically located at the Bank’s Head Office at Commercial House, 21, Sir Razeek Fareed Mawatha (Bristol Street), Colombo 1, this rebranded Corporate Branch stands as a first of its kind in Sri Lanka —a premier financial hub tailored exclusively to the needs of corporate customers, the Bank said. The transformation aligns with the Bank’s vision of providing unparalleled service excellence, bespoke financial solutions, and fostering long-term business partnerships.
Commenting on this strategic initiative, Commercial Bank’s Managing Director/CEO Sanath Manatunge stated: “It is our aspiration that just as the historic Delft Gateway, at which our Head Office is located, once opened the path to the Dutch Fort, our Corporate Branch will chart a new era of enduring and prosperous business collaborations, that will extend beyond Sri Lanka’s shores.”
Fits Retail has partnered with retail giant Abans PLC to showcase the iconic DeLonghi coffee machines at two of Colombo’s most prestigious locations: Abans Elite Colombo 3 and Abans Havelock City Mall showrooms.
At these dedicated demonstration zones, visitors can discover the unparalleled precision engineering and user-friendly technology that have made DeLonghi machines the preferred choice for discerning coffee lovers in more than 46 countries worldwide. Renowned for consistently delivering café-quality espresso, cappuccino, and even specialty cold brews, DeLonghi machines exemplify Italian innovation at its finest.
Yasas Kodituwakku, CEO of Fits Retail, expressed excitement about the collaboration: “This partnership represents our unwavering commitment to bringing global coffee excellence to Sri Lankan connoisseurs. With Abans PLC, we’re creating more than just demonstration spaces; we’re curating premium destinations for an authentic coffee experience.”
“As pioneers of premium lifestyle experiences in Sri Lanka, our collaboration with Fits Retail aligns seamlessly with our vision of elevating everyday moments into exceptional experiences,” said Tanaz Pestonjee, Director Business Development at Abans PLC.
Business
Members’ Night of the Sri Lanka – Russia Business Council of The Ceylon Chamber of Commerce
The Sri Lanka-Russia Business Council (SLRBC) of The Ceylon Chamber of Commerce (CCC) hosted a Members’ Night on March 27, at the Sophia Colombo City Hotel. The event, attended by His Excellency Levan S. Dzhagaryan, Ambassador of Russia to Sri Lanka, offered a valuable platform for business leaders, embassy officials, and Members to discuss and explore opportunities for deeper Sri Lanka-Russia collaboration, a CCC news release said.
SLRBC President, Mr. Jude Fernando, kicked off the evening with a speech highlighting the importance of strengthening international ties, which was followed by H.E. Dzhagaryan’s address on the need for continued engagement between the two countries. The event featured networking opportunities, allowing Members to connect with key stakeholders and discuss future business ventures, followed by a delightful dinner.
The event was made possible with the generous support of sponsors, including OCEAN 7 Logistics (Pvt) Ltd, Bally/Walkers Tours, Fibre cement associations, Ceylon Fresh Teas, SCANWELL Logistics, Regency Teas, Shan Teas, and others, whose contributions were key to its success.
The SLRBC is committed to further facilitating trade and cultural exchange between Sri Lanka and Russia, continuing to foster stronger business relationships.
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