Sri Lanka used USD 265Mn from reserves to maintain the Rupee so far in 2022

Sri Lanka has been trying to hold the Rupee at 200 per dollar till February, until CBSL decided to float it at first week of March. Due to the insufficient International Reserves and depleting FX inflows, monetary authorities had to let it go. CBSL had asked banks to sell 50% of their FX inflow to Central bank to mitigate the situation. But it was not sufficient to face the growing FX demand and debt payments. CBSL had purchased USD 536Mn from market, but had sold USD 800Mn resulting USD 265Mn net outflow from reserves in first three months of March 2022.