(Corrected) CBSL purchased USD 83 Mn in September, resulting in USD 1.727Bn net purchases for this year so far. Last year, CBSL sold USD 585Mn to manage the exchange rate. CBSLs’ involvement is visible in the FX market whenever abnormal volatility prevails.
IMF has been watchful of CBSL’s intervention in the FX market as IMF advises buying FX from the market to build foreign reserves rather than defending the currency like in the past. Tourism and worker remittances are growing at a healthy rate generating close to USD 700 to 800Mn per month, while the trade deficit is been curtailed to less than USD 500Mn per month. FX debt service is around USD 100 to 150Mn per month, resulting in balancing off the current account without much trouble.