Sri Lanka’s Central Bank bought a net US$348.6 million from the domestic foreign exchange market in July, official data show, as the rupee settled following a volatile spring.
The monetary authority sold no dollars at all during the month. That marks a shift from May, when it sold more than US$211 million on a net basis — its first net sale in 22 months.
Net purchases for the first seven months of 2026 now stand at US$905 million. The Central Bank bought a net US$2 billion across the whole of last year.
What pushed the rupee down in May
The currency came under heavy downward pressure in May, touching a four-year low. EconomyNext attributed the strain to an unusually large fuel import bill following escalation in the Middle East, combined with sustained demand for dollars to fund new vehicle purchases.
That episode prompted the net dollar sales in May that broke a long run of one-way accumulation.
Why the bank keeps buying
The Central Bank has been buying dollars aggressively to build foreign currency reserves toward targets agreed with the International Monetary Fund under the US$3 billion Extended Fund Facility, and to service multilateral and bilateral debt.
The reserve build-up is also positioning for a larger obligation ahead: repayments to sovereign bondholders fall due in April 2028.
