Sri Lanka’s foreign reserves overstated by USD 1.4 billion

19-Jun-2025

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A study has revealed that Sri Lanka’s officially reported foreign reserves have been overstated by approximately USD 1.4 billion.

According to analysis by Verité Research, the inflows from a USD 10 billion currency swap with the People’s Bank of China (PBoC)—valued at USD 1.4 billion—were incorrectly classified as foreign reserves . 

These assets don’t meet international standards for foreign reserves set out in the IMF’s Balance of Payments Manual, Sixth Edition, which requires such assets to be liquid and available for immediate use

For example, in May 2025, the Central Bank reported official reserves at USD 6.3 billion, but under IMF guidelines, the accurate figure should be closer to USD 4.9 billion .

Using the inflated figures, politicians and officials have compared foreign reserves across different time periods, leading to distorted public narratives about reserve growth. Analysts recommend using the IMF-defined “usable reserves” figure to ensure accurate and comparable reporting.