CONTINUOUS FOREIGN CURRENCY INFLOWS

Foreign currency inflows to the financial market during the first nine months of 2012 have continued to strengthen the capital and financial account of the BOP.

At the Colombo Stock Exchange (CSE), net foreign investment inflows have been recorded for each month so far in 2012.

There has also been a significant increase in foreign investments in government securities during the first nine months

of 2012 and net investments in Treasury bills and Treasury bonds during the first nine months of 2012 amounted to US$ 820.7 million.

Meanwhile, long-term loans obtained by the government during the first nine months of 2012 amounted to US$ 2,404 million.

In addition, long-term borrowings by commercial banks during January-September 2012 amounted to US$ 927.5 million.

Foreign direct investment (FDI), including foreign loans obtained by the BoI companies, of which data become available only quarterly, amounted to US$ 452 million for the first half of 2012 and more inflows are expected to materialise during the remainder of the year.

Gross official reserves amounted to US$ 7,053 million by end-September 2012, while total international reserves, which include gross official reserves and foreign assets of commercial banks, amounted to US$ 8,610 million.

In terms of months of imports, gross official reserves were equivalent to 4.3 months of imports by end-September 2012, while total reserves

were equivalent to 5.2 months of imports.