Sri Lanka’s official reserve assets fell 1.1% to US$6.85 billion at the end of September, down from US$6.93 billion a month earlier, even though the Central Bank was a net buyer of dollars during the month, the Daily FT and EconomyNext report from official data.
The month-on-month fall is US$78 million. The Central Bank bought a net US$64.2 million from the domestic market over the same period — a purchase pace that had already collapsed from its summer rate, and not enough to hold the stock level.
The number that matters is the one underneath
The headline figure comes with a larger qualifier than usual. Predetermined short-term net drains on foreign currency assets — outflows already scheduled over the next 12 months — stood at US$5.91 billion, equivalent to 86% of reserves.
The Daily FT breaks that down by timing:
| Falls due | Amount |
|---|---|
| Within one month | US$431 million |
| One to three months | US$1.11 billion |
| Three to twelve months | US$4.37 billion |
And by type. Short positions in forwards and swaps are the largest single component at US$3.58 billion — commitments to deliver foreign currency at a future date, including the repayment leg of currency swaps. Foreign currency loans, securities and deposits account for a further US$2.33 billion, made up of US$1.37 billion in principal and US$963 million in interest.
Both splits reconcile to the US$5.91 billion total, and the month-on-month arithmetic holds: US$6,929 million less US$6,851 million is the US$78 million reported, or 1.1%.
August was the peak, and it has turned over
Neither filing sets September against August, and the comparison is the sharpest thing in the release.
August was a five-month high for reserves, reached on a record US$579 million of Central Bank purchases in a single month, as this site reported in September. September’s net purchase of US$64.2 million is roughly one-ninth of that, and the reserve position has gone from rising 4.6% to falling 1.1%.
The scheduled drain has barely moved — it was close to US$6 billion in the August data and is US$5.91 billion now — but its composition has shifted: principal and interest on foreign currency obligations has risen from US$2.2 billion to US$2.33 billion.
A US$8 billion target, and where it would have to come from
EconomyNext reports that analysts consider the Central Bank’s year-end reserve target of US$8 billion achievable, on the strength of dollar inflows from the IMF and other multilateral institutions in the final quarter.
That requires roughly US$1.15 billion to be added in three months. At September’s rate of market buying it would take a decade and a half, so on the analysts’ own reasoning the target rests on official inflows rather than on the Central Bank’s purchases from the domestic market. Sri Lanka reached a staff-level agreement on the IMF’s seventh review last week.
The Central Bank has been accumulating reserves to meet targets agreed under the US$3 billion Extended Fund Facility and to service multilateral and bilateral loans. Repayments to International Sovereign Bond holders are due to begin in April 2028.
The year’s one reversal
Both outlets note the single break in the buying programme. In May the Central Bank sold a net US$211 million — its first net sale in 22 months — as the rupee came under heavy pressure from a fuel import bill inflated by the escalation in the Middle East and continued demand for dollars to import vehicles. It raised the Overnight Policy Rate that month. The rupee recovered over the following two months before weakening again in September.
Net purchases for the first nine months of 2026 stand at US$1,548.8 million, against US$2 billion for the whole of 2025.
“Greater exchange rate flexibility remains key to absorbing shocks and supporting reserve accumulation,” IMF Mission Chief for Sri Lanka Evan Papageorgiou said after the seventh review.
Not reported
Neither filing states the reserves figure in months of import cover, the standard adequacy benchmark, and neither gives the September split between foreign currency reserves and gold holdings — both of which the August release carried.
Neither says whether the September total includes proceeds from the People’s Bank of China swap arrangement, whose usability is subject to conditions. This question was left open in the August reporting too and remains unanswered by a citable source; it matters because it determines how much of the US$6.85 billion is freely usable.
Neither outlet gives a figure for October to date, says whether the buying pace is expected to recover, or reports what the Central Bank itself attributes the September decline to.
Ada Derana also carried the release, but its site has returned a CloudFront block to every fetch attempt for more than three weeks, so it is not cited here.
Sources: Daily FT, EconomyNext.
