• Central Bank’s foreign exchange purchases drive a significant increase, reaching $ 3.4 b by April
• Commercial banks also see substantial gains, boosted by growing remittances and export earnings

Sri Lanka’s banking sector net foreign assets have gained over 2,000% year-on-year (y-o-y) by April, mainly driven by the net foreign assets accumulated by the Central Bank, Central Bank data showed.

According to weekly indicators by the Central Bank, net foreign assets in the banking sector stood at Rs. 1019.8 billion ($ 3.4 billion) by end of April as compared to the negative Rs. 52.9 billion ($ 180 million) in April last year, indicating a 2028.1% increase in rupee terms.

Data showed that net foreign assets held by the Central bank increased by 237.3% y-o-y in rupee terms to Rs. 433 billion ($ 1.4 billion) in April from being negative Rs. 315.3 billion ($ 1.05 billion).

The Central Bank’s net foreign asset build up is mainly driven by the purchase of foreign exchange from the domestic market as the Central Bank has made net purchases amounting to $ 697.3 million in the first four months of 2025.

Net foreign assets in the commercial banks rose by 123.6% from last April to Rs. 586.8 billion ($ 1.96 billion) mainly with the growth of remittances and export earnings to the country.

Remittances received through the banking system by April stood at $ 2.46 billion, a 18.3% increase y-o-y, while export earnings stood at $ 4.31 billion, an increase of 6.4% from last April.

Net foreign assets in the Sri Lankan banking sector turned positive for the first time in May 2024 since April 2020, reaching Rs. 93.9 billion as the country started to phase out from continued pressures on foreign exchange.