Colombo, March 1, 2025 – Sri Lanka’s foreign exchange earnings outpaced imports by $546 million in January 2025, driven by strong export performance, remittances, and tourism revenue, according to data from the Central Bank.
Total foreign exchange inflows, comprising exports, gross services—including tourism—and worker remittances, reached $2.33 billion for the month. This marks a decline from December 2024, when inflows stood at $2.41 billion.
Breakdown of Foreign Exchange Earnings
- Exports: $1.05 billion
- Worker Remittances: $573 million
- Gross Services: $705.7 million, including estimated tourism earnings of $400.7 million
- IT/BPO Services: $68 million
On the expenditure side, services outflows totaled $287.4 million, with outbound travel expenses accounting for $52.4 million.
Investment and Trade Trends
Investment goods and base metal imports surged to $389 million in January 2025, compared to $294 million in January 2024, reflecting increased private sector credit activity. As private credit expands, foreign exchange inflows from exports, remittances, and tourism earnings are often converted into domestic investments.
Monetary Policy and Economic Stability
Maintaining a balanced interest rate is crucial for managing reserves and debt repayments. Excessively low interest rates could spur excessive private credit growth, making it difficult to accumulate reserves and requiring debt repayments from existing reserves.
Analysts have raised concerns over the Central Bank’s monetary policy in late 2024, cautioning that liquidity injections into the banking system could lead to increased money printing, higher consumer imports, and potential reserve depletion.
With Sri Lanka’s economy showing signs of recovery, careful monetary management will be essential to sustain foreign exchange stability and manage external debt obligations.
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