📈 Sri Lankan Banks Build Foreign Buffer as Private Sector Cuts Offshore Debt

• Banking Sector Foreign Assets & Liabilities: • Foreign assets rose to US$ 6.6 Bn by end-July 2026 (up from US$ 5.5 Bn at end-2025). • Foreign liabilities decreased to US$ 5.0 Bn (down from US$ 5.5 Bn at end-2025). • Net foreign assets reached a record high of US$ 1.6 Bn (reversing 2015 levels of US$ 2.0 Bn assets vs US$ 9.1 Bn liabilities). • Interest paid on foreign loans by deposit-taking institutions rose 13.3% YoY to US$ 40.3 Mn (Jan–Aug 2026). • Private Sector De-leveraging: • Private sector recorded net foreign loan repayments of US$ 94 Mn in 1H 2026. • Total net repayments reached approximately US$ 1.1 Bn since the start of 2023. • The sector has been a net repayer of offshore debt every year since 2019, with the exception of 2022 (+US$ 9 Mn). • National Reserve Position: • Gross official reserves stood at US$ 6.9 Bn at end-August 2026 (including the People's Bank of China swap facility).