Central bank becomes net dollar seller after 22 months

Sri Lanka’s Central Bank acted as a net seller of US dollars in April, marking the first such occurrence in nearly two years as the country works to meet reserve targets agreed with the IMF.

Official data reveals that the bank sold 13 million US dollars on a net basis during the month, a shift from its long-standing trend of purchasing currency to bolster reserves. Despite this April sale, the institution remained a net buyer for the first four months of 2026, securing 697.2 million US dollars following a 2-billion-dollar net purchase last year.

The decision to sell dollars aligns with a 3.7% decline in gross reserves, which dropped to 6,579 million US dollars in April from 7,019 million US dollars in March. This period also saw the rupee depreciate by more than 1 per cent in the month leading up to 8 May.

While the nation continues to repay multilateral and bilateral loans, repayments to sovereign bondholders are not expected to resume until April 2028. The Central Bank previously engaged in aggressive reserve building to prepare for those upcoming foreign debt obligations.