📈 CBSL Chief Urges Focus on FX Reserve Buffers Amid Global Uncertainty

• Strategic Focus: Speaking at the Reserve Management Conference 2026 in Colombo, CBSL Governor Dr. Nandalal Weerasinghe urged central banks to prioritize liquidity and safety over investment returns amid geopolitical fragmentation, sanctions, and trade risks. • Lessons from Crisis: Highlighting Sri Lanka's 2022 economic crisis, he noted that critically low reserves constrained essential imports, aggravated exchange-rate volatility, and limited policy responses. • Asset & Portfolio Strategy: • US Dollar: Retains unmatched liquidity for global trade, but uncalculated diversification must be avoided. • Gold: Noted renewed interest as a credit-risk-free store of value, though liquidity remains the primary anchor. • Reserve Adequacy: Called for broader risk-management frameworks over traditional single metrics (like months of import cover) to withstand compound shocks, including climate events like Cyclone Ditwah. • Tech & Regional Support: Stressed that AI should augment—not replace—human judgment in managing national reserves. Highlighted bilateral support, such as assistance from the Reserve Bank of India, as key to regional financial resilience.