Official foreign reserves pass $7 billion; Central Bank bought $191 million in October

As the Central Bank of Sri Lanka (CBSL) stepped up its purchase of US dollars from the domestic foreign exchange market, official reserve assets passed the $7 billion mark at the end of October. Official reserves stood at $7.09 billion at the end of October, up from $6.9 billion a month earlier. Foreign currency reserves rose from $6.62 billion to $6.84 billion.

Reserves increased by $190 million in October, matching the $191.3 million the Central Bank bought on a net basis that month. No sales were made during the month. Expected short-term outflows, including maturing currency swaps and debt service, amount to $5.75 billion, representing 84 per cent of foreign currency reserves. That leaves roughly $1.09 billion free of near-term obligations.

October's net purchase of $191.3 million is the largest since August, but 67 per cent below August's record $579 million. It is three times September's $64.2 million. Total net purchases in the first 10 months of 2026 exceeded $1.73 billion, only about $270 million short of the full-year 2025 figure of $2 billion.

The rupee came under heavy pressure when the Middle East conflict intensified at the end of February, with depreciation for the year peaking at 7.9 per cent by the end of June. As the rupee then strengthened, purchases accelerated to $348.6 million in July and $579 million in August.