CBSL to launch new investment tranche with advanced strategies, prioritizing foreign reserves

With projections indicating historically high levels of inflows from the services trade and workers’ remittances, the Central Bank of Sri Lanka (CBSL) plans to capitalize on market opportunities through diversified strategies across various markets.

These initiatives include establishing a new investment tranche leveraging advanced portfolio management strategies.

Additionally, the CBSL projects that the country is likely to record a current account deficit in 2025, driven by increased economic activity and underscores the importance of maintaining the external current account at sustainable levels over the medium term.

In its policy agenda for 2025, the Central Bank of Sri Lanka highlighted that the near completion of the government’s external debt restructuring and the progress achieved under the IMF-EFF programme have created a robust foundation for boosting investor confidence and ensuring external sector stability.

The regulator noted that the country has consistently recorded a current account surplus over the past two years, in 2023 and 2024. 

However, as economic activity gains momentum, the external current account is projected to register a deficit in 2025. 

CBSL emphasized the importance of maintaining the external current account at sustainable levels over the medium term.

The report also projected a gradual recovery in import expenditure, driven in part by the government’s planned relaxation of vehicle import restrictions in 2025. 

Inflows from the services trade and workers’ remittances are expected to reach historically high levels, supporting the external current account.

The Central Bank stated its commitment to increasing external buffers and expanding reserve management activities through market diversification strategies.

These efforts include the establishment of a new investment tranche utilizing advanced portfolio management strategies. 

The CBSL will prioritize strengthening risk mitigation measures to safeguard foreign reserve investments.

Also, the CBSL said that the International Transactions Reporting System which is in operation since early 2024 will be used to improve the data quality and coverage of the financial account of the Balance of Payment, facilitating policy analysis and planning related to foreign exchange flows.