Sri Lanka’s gross foreign exchange inflows exceeded imports by $757 million in August 2024, according to data released by the Central Bank of Sri Lanka. The total inflows for August stood at $2.411 billion, while imports were recorded at $1.654 billion.
These inflows included $1.224 billion from merchandise exports, the highest since August 2022, $577.5 million in remittances, and $609.3 million from services, including an estimated $282 million from tourism. Travel abroad accounted for $99.7 million, and air transport was reported at $61.2 million. Services outflows for the month amounted to $322 million.
The trade deficit persists, as non-merchandise inflows like tourism and remittances generate imports when spent domestically. Foreign-funded projects, which are part of financial account inflows, will also drive import growth once they resume.
The central bank has a reserve target under the International Monetary Fund (IMF) program, and ongoing deflationary policies are supporting foreign reserve accumulation. However, analysts caution that if the central bank cuts rates when private credit recovers and prints money to maintain a policy rate, the balance of payments could turn to deficit, leading to rupee depreciation and potential default on restructured bonds.