📉 Sri Lanka’s Foreign Reserves Fall 1.1% to US$ 6.85 Bn in Sept 2026

Sri Lanka’s gross official foreign reserves dropped by 1.1% month-on-month to US$ 6,851 Mn at the end of September 2026, down from US$ 6,929 Mn in August, despite active market interventions by the Central Bank of Sri Lanka (CBSL). • Reserve Building & Dollar Purchases: - CBSL net purchased US$ 64.2 Mn in September as part of an aggressive reserve accumulation strategy. - Year-to-date net purchases reached US$ 1,548.8 Mn for the first nine months of 2026 (compared to US$ 2 Bn net purchases in 2023/2024). - Analysts maintain the CBSL’s year-end target of US$ 8 Bn remains achievable, supported by expected Q4 multilateral and IMF inflows under the US$ 3 Bn EFF programme. • Currency & External Pressures: - The rupee experienced high downward pressure in May 2026 due to an elevated import bill for fuel (triggered by Middle Eastern tensions) and vehicle demand, leading to net dollar sales of US$ 211 Mn—the first net sale in 22 months. - Despite appreciating in June and July, currency pressure resurfaced in September. • Debt Servicing & Economic Context: - Rebuilding foreign exchange buffers remains vital ahead of sovereign bond debt repayments commencing in April 2028. - Maintaining adequate reserves is critical for post-default macroeconomic stability, fulfilling IMF targets, and ensuring sustained relations with international capital markets.