The Central Bank of Sri Lanka (CBSL)  said yesterday that the external sector showed signs of stabilisation, with the removal of most lockdown measures in the second week of May.

The External Sector Performance -May 2020 report said the impact of restrictions on non-essential imports was observed in May with a notable reduction in merchandise imports.

Meanwhile, merchandise exports, which dropped significantly in April, rebounded more than expected during the month. Workers’ remittances were significantly low in May 2020 compared to the same period in 2019, but recorded a notable increase compared to the extreme low levels recorded in April 2020.

In relation to financial flows, the total exposure of foreign investment in the government securities market remained significantly low with a marginal outflow of government securities being recorded in May. With the resumption of trading in the Colombo Stock Exchange (CSE) in mid May 2020, there were some outflows of foreign investment. The Sri Lankan rupee stabilised, mainly aided by an improved trade deficit, recording an appreciation of 3.5 per cent during the month of May.

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