Foreign reserves fall by US$ 423 Mn in June as imports surge

Sri Lanka's official foreign reserves declined by US$ 423 million to US$ 6.54 billion in June 2026, according to First Capital Research (FCR).

The research firm also noted that merchandise imports rose sharply in May 2026, increasing 45.4% year-on-year (YoY) to US$ 2.19 billion, reflecting stronger domestic demand and higher spending on fuel and intermediate goods.

All major import categories recorded growth during the month, with intermediate goods posting the highest increase of 53.0% YoY, followed by consumer goods at 44.4% YoY and investment goods and other imports at 25.3% YoY.

Within consumer goods, non-food imports rose 57.3% YoY, while food and beverage imports increased 25.9% YoY. Among intermediate goods, fuel imports surged 112.0% YoY and fertiliser imports climbed 130.1% YoY, making the largest contribution to the increase.

Meanwhile, merchandise exports reached US$ 1.22 billion in May 2026, recording an 18.3% YoY increase. The growth was driven primarily by a 23.8% YoY rise in industrial exports, while agricultural exports edged up 0.4% YoY and mineral and other exports increased 29.7% YoY.

Within industrial exports, petroleum products recorded the strongest growth at 118.8% YoY, followed by food, beverages and tobacco (10.4% YoY) and textiles and garments (6.7% YoY). In the agricultural sector, coconut exports increased 26.9% YoY, while exports of tea, spices and seafood recorded marginal declines.

As a result of the faster growth in imports, Sri Lanka's current account balance recorded a deficit of US$ 194.5 million in May 2026, compared with a surplus of US$ 171.3 million in the corresponding month of 2025, FCR said.