According to the Central Bank of Sri Lanka (CBSL), the country’s merchandise trade balance recorded a surplus in June 2022 for the first time in 20 years, for the first time since August 2002.
CBSL notes the trade balance surplus reflects the impact of historically high monthly export earnings and the ongoing decline in import expenditure.
Despite the negative sentiments associated with travel advisories and the ongoing fuel shortage and resulting transportation difficulties, tourism earnings increased (year on year) in June 2022 from a low base.
Remittances from workers moderated in June 2022, compared to May. 2022, reflecting an increase in grey market foreign exchange transaction activity. Foreign investment in the government securities market was marginally net positive, while it was negative in the Colombo Stock Exchange.
The Canadian Securities Exchange (CSE) experienced a minor net outflow in June 2022. The Central Bank continued to provide forex liquidity to finance critical imports, depleting usable gross official reserves.
During the month, the weighted average spot exchange rate in the interbank market remained around Rs. 360/- per US dollar.