Sri Lanka’s Central Bank continued its active foreign exchange market interventions in 2025, purchasing a net US$1.7582 billion in foreign currency over the year. The move aimed to stabilize the Sri Lankan rupee and rebuild foreign exchange reserves, which have been a major policy focus since the country’s economic crisis.
According to data released, the Central Bank’s dollar purchases included US$222.5 million in December 2025, contributing to the total figure for the year. Although significant, this was below the levels recorded in 2024 (US$2.8457 billion) and 2023 (US$1.8959 billion) — periods marked by stricter import controls, including suspended vehicle imports and other restrictions.
The Central Bank’s dollar buying was part of broader efforts that helped gross official reserves grow to approximately US$6.825 billion by the end of 2025 — nearly US$1 billion higher than at the start of the year. This marks one of the strongest reserve positions Sri Lanka has seen in recent years, supported by robust remittance inflows, export earnings, and expanding tourism receipts.
Strong remittances were a key driver, rising more than 22 percent to over US$8 billion, while merchandise exports also rose modestly in the first ten months of the year. However, Sri Lanka’s trade deficit widened as imports strengthened following the resumption of vehicle imports and other goods. Overall imports increased nearly 14 percent year-on-year, with October alone seeing a sharp jump.
Economists say the Central Bank’s dollar purchases helped limit the rupee’s depreciation to less than 5 percent in 2025, a noteworthy outcome after two consecutive years of appreciation in which the currency strengthened by about 22 percent against the US dollar. Such stability has been crucial for inflation and market confidence.
While external reserves could have been even higher had a delayed US$347 million IMF programme tranche been received on time, Sri Lanka’s foreign currency position remains markedly improved compared with earlier in the decade.
