Sri Lanka hits a record foreign reserves level!

Sri Lank's foreign reserves hits a record figure!! Wow great!! this is a very good indication of re gaining the county's economic stability after the costly war with rebels.  The defense budget was sucking the the national resources and it hit the national development over past three decades.  Now the war has ended and looks like economy of the country is becoming stronger.

What does Foreign exchange reserves means? Wiki says:

Foreign exchange reserves (also called Forex reserves) in a strict sense are only the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, SDRsIMF reserve positions. This broader figure is more readily available, but it is more accurately termed official international reserves or international reserves. These are assets of the central bank held in different reserve currencies, mostly the US dollar, and to a lesser extent the euro, the UK pound, and the Japanese yen, and used to back its liabilities, e.g. the local currency issued, and the various bank reserves deposited with the central bank, by the government or financial institutions.

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There was a big concern on the remaining foreign reserves specially during the war period.  Now the way has ended and SL could increase its reserves using IMF loan.  Many people were asking what happened to IMF loan and now we can see how it was used in development.  This is a long term investment that was made by the government.  It is really appreciated that this loan is used not to subsidize any service but to increase the reserves.  Foreign exchange reserves are important indicators of ability to repay foreign debt and it would develop the credibility of the country.  

The following news was published few months back.  Their intention seems worked

Read below for more information:  Click here to view the source

Sri Lanka's foreign reserves reach high of US$4 bil.: central bank
COLOMBO -- Sri Lanka's foreign reserves have hit a historic high of four billion U.S. dollars, sufficient to cover over four months of imports, the Central Bank of Sri Lanka said Tuesday.

“With the renewed investor confidence and the continuation of the steady increase in foreign exchange inflows, the country's external reserve position is expected to strengthen further in the coming months,” the bank said.

Sri Lanka's reserves had fallen to dangerously low levels earlier this year as security forces pushed forward with their final offensive against separatist Tamil Tiger rebels.

The reserves have since been boosted by the first tranche worth US$322.2 million of an IMF loan in July, higher remittances, donor funds and foreign investors buying rupee-denominated treasury bills and bonds.

The bank has also raised cash by selling dollar debt.

The Sri Lankan government secured a US$2.6 billion IMF bailout package to help stave off its first balance-of-payments deficit in four years.

LBO reported

Reserve Level 25 Nov, 2009 15:36:11
Sri Lanka foreign reserves US$5.2bn in November
Nov 25, 2009 (LBO) - Sri Lanka's foreign reserves had climbed to 5.2 billion US dollars by November 20, helped by strong capital inflows and International Monetary Fund loans, the Central Bank said.

Gross official reserves were at 4,822 million US by end October 2009. Reserves were at 5.045 million US dollars with balances at Asian Clearing Union, a regional settlement arrangement.

The central bank said 247 million US dollars had come into government Treasury bills and 1,069 million into Treasury bonds during the period. Reserves were equal to 5.9 months of imports.

By November 20, reserves were estimated at 5.2 billion US dollars. The Central Bank said it had bought 2,837 million US dollars from the market since March 2009.

The International Monetary Fund has also given 331 million US dollars under a second tranche.
Sri Lanka went to the IMF when reserves dipped to around a billion US dollars in March following an extended period of expansionary peg defence.