Is COVID19 Pandemic the Sole Cause for the Depletion in Sri Lanka’s Foreign Reserves?

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Sri Lanka’s usable foreign reserves fell from USD 7,642 MN in 2019 to USD 1,579 MN by the end of 2021. When compared with Sri Lanka’s regional peers during the pandemic, the decline in its reserves appears to only have happened to Sri Lanka, while its other Asian countries have seen an increase in their reserve balances.

Sri Lanka’s reserves have declined by 79% from 2019-2021 while its regional peers have experienced a growth.

The decline in the reserves cannot be solely attributed due to the pandemic.

If it was the case other Asian counterparts should have experienced the same decline. (ThePublicFinance)

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