CBSL buys $ 1 b from domestic market

Move boosts reserves, liquidity and private sector credit

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THE Central Bank of Sri Lanka (CBSL) has in the first half of 2025 purchased $ 1 billion from the domestic market, in the process boosting reserves, liquidity, and private sector credit.

Liquidity in Sri Lanka’s domestic money market remained in surplus throughout the first half of 2025, continuing a trend that began in April 2024. As of end-June 2025, excess liquidity stood at Rs. 138.1 billion, down from Rs. 168.1 billion at end-2024.

The average monthly surplus during the first six months of 2025 was Rs. 154.6 billion, the CBSL said in its June 2025 Market Operations Report.

The primary driver of liquidity injection was the CBSL’s net purchase of $ 1,014.1 million from the domestic foreign exchange market. This added Rs. 408.7 billion to market liquidity.

The aim was to bolster foreign reserves, which reached $ 6.08 billion by the end of June 2025, the CBSL said.

However, liquidity was partially absorbed by other factors. These included Government foreign loan repayments totalling Rs. 231.9 billion, net currency withdrawals of Rs. 106.4 billion, coupon payments of Rs. 95 billion to the CBSL on its Treasury Bond holdings, and Treasury Bond maturities worth Rs.

6.7 billion.