• Interest payments account for $ 541 million of the total outflows
• Rupee expected to depreciate to Rs. 305-315 per US dollar by mid-year

Sri Lanka has net foreign currency asset drains amounting to $ 1.36 billion for 2025, out of which $ 541 million are in interest payments, Central Bank (CBSL) data showed.

Accordingly, CBSL has predetermined short-term net drains on foreign currency assets amounting to $ 1.363 billion in the next 12 months.

Majority of net payments, amounting to $ 1.03 billion is expected between in the next three to 12 months.

Out of the outflows, $ 822 million are as principal payments and $ 541 million.

Sri Lanka’s foreign reserves stood at $ 6.09 billion at the end of 2024 after settling consent fees for the debt restructuring while First Capital expects foreign reserves to be at $ 7 billion by end of year.

First Capital expected debt repayment resumes from December and remains moderate in the near term with Sri Lanka expecting $ 1.36 billion net inflows as funding from multilateral agencies.

The rupee has appreciated by 1.3% as of 17 January with First Capital expecting the rupee to depreciate between Rs. 305-315 per US dollar by mid-year due to the slowness in the economic recovery, supported by strong tourism earnings and worker remittances.

Moreover, the net foreign assets of the banking sector stood at $ 1.4 billion.

First Capital said that Sri Lanka’s balance of payment position (BOP) growth is expected to be limited in the medium term caused by resumption of debt repayments and widening trade deficit, limiting BOP surplus to under $ 700 million.