Foreign inflows to outpace outflows in 2021 | Daily News

Foreign inflows to outpace outflows in 2021

The Central Bank is projecting that foreign inflows will outpace outflows in 2021. Central Bank Governor Prof. W D Lakshman noted that there were politically motivated attacks on the state of government finances.

There are currently negotiations ongoing to secure credit lines with the rate of borrowing between 6-7% and tenure between 1-8 years.

Prof. Lakshman criticised models that forecast default on the basis of the level of reserves and upcoming commitments. He said these forecasts were based on unfair extrapolations of the economy with 2020 figures that were hampered due to the COVID-19 outbreak.

Prof. Lakshman was speaking on a webinar at the Central Bank of Sri Lanka on the state of the economy last Friday.

In 2021 the Central Bank forecasts Port City leases to bring in USD 1 billion, remittances to bring in USD 7.5 billion, merchandise exports to bring in USD 13 billion, tourisms to bring in USD 1.75 billion, and IT/BPO to bring in USD 1.75 billion.

Merchandise imports are projected to be USD 17 billion. With import restrictions, the Central Bank forecasts a small current account surplus in 2021.

The governor noted that financing through the IMF would bring in undesirable conditionality.

The governor provided assurances that the secured financing would not be tied even tacitly to favourable terms on other agreements.