Dr. P. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka, has emphasized the near completion of the Government’s external debt restructuring and significant progress under the IMF-EFF program as pivotal factors in boosting investor confidence and ensuring the stability of the external sector.
Dr. Weerasinghe pointed out that the Central Bank will continue to closely monitor developments and risks on the external front to implement appropriate policies in a timely manner. He noted that Sri Lanka has recorded a current account surplus for two consecutive years, in 2023 and 2024. However, with the expected increase in economic activity, the external current account is likely to show a deficit in 2025. Maintaining the external current account at sustainable levels in the medium term remains crucial.
A gradual recovery in import expenditure is anticipated, particularly with the planned relaxation of vehicle import restrictions by the Government in 2025. Furthermore, the external current account will be supported by inflows from services trade and workers’ remittances, which are projected to reach historically high levels.
Dr. Weerasinghe stressed that long-term stability in the external sector will be built upon the ongoing IMF-EFF program, which aims to implement necessary reforms and foster overall macroeconomic stability. The Central Bank is committed to rebuilding external buffers under the program by purchasing foreign exchange from the market. This accumulation of external buffers will be facilitated by increased foreign exchange inflows from higher earnings in merchandise and services exports, workers’ remittances, and foreign direct investment.
