The gross official reserve level (GOR) increased to around USD 3.7 billion by end June, compared to USD 3.5 billion as at end May 2023.
This increase was mainly due to the receipt of around USD 250 million from the World Bank at the end of the month. The Central Bank supplied USD14 million to the domestic foreign exchange market on a net basis during the month. Overall, the Central Bank has purchased about USD 2 billion, on a gross basis during January-June 2023.
Foreign investment in the government securities market recorded a notable net inflow of USD 68 million in June 2023, while cumulative net inflow during January to June 2023 amounted to USD 426 million. Foreign inflows to Treasury bills increased in the last few months notably due to improved investor appetite, supported by more clarity on domestic debt optimization operations.
Meanwhile, foreign inflows to the Colombo Stock Exchange (CSE), including both primary and secondary market transactions, recorded a marginal net inflow of USD 2 million during January – June 2023, despite recording a marginal net outflow of USD 0.9 million during June 2023.
Total export earnings remained above USD 1 billion for the second consecutive month in June 2023. However, earnings from merchandise exports declined by 19.5% in June 2023, over the corresponding month in 2022, to USD 1,005 million.
Earnings from the exports of industrial goods declined in June 2023, compared to June 2022, due to a broad-based decline in earnings from most of the industrial products led mainly by garments.
Exports of garments to most of the major markets (the USA, the EU and the UK) continued to record declines resulting from subdued demand conditions in major markets.
Earnings from the exports of agricultural goods declined in June 2023, compared to a year ago, driven by lower export volumes of seafood.
Earnings from mineral exports declined in June 2023, compared to June 2022, mainly due to the decline in exports of earths and stone; and ores, slag, and ash.
Expenditure on merchandise imports increased by 11.6% to USD 1,369 million in June 2023, compared to USD 1,226 million in June 2022.
The increase in import expenditure was observed across all main categories of imports, which was supported by the significantly low base in June 2022.
Meanwhile, cumulative import expenditure during January to June 2023 declined by 18.6% over the corresponding period in 2022.
However, the relaxation of import restrictions, commenced during June and July 2023, could gradually generate higher import expenditure in the period ahead.
