DOLLAR INFLOWS IMPROVING-CB

Foreign exchange inflows continued to remain healthy during the past few weeks, and this trend was reflected in the exchange rate last Friday, as the rupee appreciated to 128 against US dollar, according to the Central Bank.

“The Central Bank also absorbed a substantial part of these foreign exchange inflows, resulting in the gross official reserves increasing considerably during March 2012,” Central Bank said. In the meantime, the month-to-month growth in import expenditure decelerated to 20 per cent in January 2012 from 34 per cent in December 2011.

The Central Bank is expecting a further deceleration in import growth in response to various policy measures introduced by the Central Bank, and the Government in February and March 2012. “At the same time, other foreign exchange inflows to different sectors of the economy are being realized as expected. In addition to funds already raised by commercial banks to strengthen their capital base, more than US dollars 500 million of further investment is expected during the next few weeks,” the Central Bank noted. Positive inflows to the equity market are continuing with the total net inflows to the

Colombo Stock Exchange amounting to US dollars 164.2 million by March 30. The inflows in respect of treasury bills and bonds have also amounted to US dollars 400 million so far in 2012.