The Central Bank of Sri Lanka says import expenditure declined, while earnings from exports increased in May 2022, year-on-year, extending the contraction in the trade deficit for the third consecutive month.
Issuing a statement, the CBSL said tourist arrivals slowed in May 2022, compared to the previous month.
The statement added workers’ remittances increased in May 2022, compared to April 2022 while foreign investment in the government securities market and the Colombo Stock Exchange recorded marginal net inflows during May 2022.
The CBSL said considering the liquidity pressures witnessed in the domestic foreign exchange market, the Central Bank imposed cash margin requirements in May 2022, while the Government introduced restrictions on open accounts and consignment payments terms, among others.
These measures the Central Bank said were expected to curtail activity in the informal foreign exchange market and narrow the gap between the official and grey market exchange rates.
Meanwhile, the CBSL added weighted average spot exchange rate in the interbank market remained stable around Rs. 359 per US dollar during the month, helped by the measures introduced to manage pressures in the domestic foreign exchange market, along with the market guidance.