Foreign reserves exceed US $ 5.2 b
Includes gold too:
Charumini de Silva
Central Bank Governor Ajith Nivard Cabraal told the Daily News that Sri Lanka has exceeded US$ 5.2 billion as foreign reserves for the first time.
The country in addition also has a reasonable amount of gold reserves. This shows the confidence among investors has increased with the country’s potential to develop business.
Cabraal said the Central Bank holds gold reserves, as it is an asset with a long-term intrinsic value.
The Central Bank has taken certain decisions in keeping gold as foreign reserves since it is important to have an asset like gold in a volatile market.
Having a large amount of foreign reserves assure and provide confidence to the public that the banking regulator has the ability of repaying the loans, imports and on due time as well, he said.
The Governor said India and China have large amounts of gold as a part of their foreign reserves and there is a tendency in moving some of their reserves to gold too.
The amount of gold found by the army in Vellamullivaikkal is not included in the current gold reserves in the Central Bank. The recovered amount of gold has to be channelled through courts, Cabraal said.
He said the country’s foreign remittances have increased by 10 percent compared to the last year and the Central Bank expects foreign remittances will further expand in the near future.
“The position of the foreign reserves is very strong. Putting all these aspects together we think that the monetary policy put in place is a bit relaxed and the interest rates have come down. There is a 50 percent drop in interest rates and there is more space for economic activities,” he said.
“We are confident that these factors will provide Sri Lanka the impetus and the momentum for the economy to grow and stabilize very well in the future,” Cabraal said.
dailynews.lk
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