## 📈 RBI Pitches INR-Led Integration for SL Growth

The Reserve Bank of India (RBI) has advocated for expanding the use of the Indian Rupee (INR) in bilateral trade and investment to deepen financial integration and reduce exchange rate risks for Sri Lanka. • Macroeconomic Outlook Sri Lanka is projected to surpass the US$ 100 Bn GDP mark in 2026. Economic growth is estimated at 4.5% for 2025, with a similar 4-5% forecast for 2026. The country maintains fiscal and current account surpluses, with inflation targeting 5% by H2 2026. • Bilateral Trade & Investment Total trade reached US$ 5.8 Bn (2024-25), with a trade deficit of ~US$ 2.69 Bn for Sri Lanka. Cumulative Indian FDI stands at US$ 2.25 Bn (as of 2023). India accounts for 23% of total tourist arrivals. • Strategic Benefits of INR Settlement Trade: Denominating exports in INR could narrow the trade gap and encourage Indian importers. Tourism: Wide INR and UPI adoption could potentially double spending by Indian tourists. Banking: Sri Lankan banks can open Special Rupee Vostro Accounts (SRVAs) to settle trade directly, reducing USD reliance and hedging costs. Investment: Using INR for FDI helps Indian firms avoid exchange rate costs on non-forex earning projects.