Sri Lanka’s balance of payments (BOP) remains in surplus in 2024, but it trails slightly behind the figures from 2023, according to official data. By June 2024, the country recorded a BOP surplus of $1.761 billion, compared to $1.957 billion in the same period the previous year.
The surplus, reflecting an improvement in net international reserves, highlights the effectiveness of the Central Bank’s deflationary policies under the current interest rate structure. However, the BOP is still behind the levels seen during the same period last year, despite ongoing efforts to stabilize the economy.
Critics have pointed out that while IMF programs allow central banks to accumulate reserves following rate hikes and credit contraction, these gains are often short-lived as economic recovery and narrow call money rates lead to missed reserve targets.
Sri Lanka’s Central Bank has laid a foundation for economic growth since 2022, stabilizing the exchange rate and undershooting inflation targets, providing stability for economic activities.