To evaluate the State Minister’s claim FactCheck consulted the Annual Report of the Central Bank of Sri Lanka for 2014 and 2019, and the Central Bank’s Weekly Economic Indicators. FactCheck considers the State Minister to be referring to Gross Official Reserves (see Additional Note (iii) for definitions on other types of reserves).
The state minister’s first claim “we had USD 8.2 billion in reserves” suggests this was the reserve position when President Mahinda Rajapaksa left office on 9 January 2015. The most recent publicly available data on reserves prior to that date is the reserve position on 31 December 2014, which places GOR at USD 8.2 billion as claimed.
The second claim is that the reserve position was down by 7% to USD 7.6 billion when the government changed with the election of President Gotabaya Rajapaksa on 16 November 2019. GOR immediately prior to and after (on 31 October and 30 November 2019) was USD 7.8 billion and 7.5 billion respectively. The state minister’s claim falls between these two figures.
The available data is in line with the state minister’s claims. Therefore, we classify his statement as TRUE.
*FactCheck’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck will revisit the assessment.
(i) Decline in GOR in 2020: by November 2020, GOR was USD 5,555, which is a reduction of 26% since November 2019 (ii) GOR Quality: USD 8.2 billion reserves in 2014 included USD 2,196 million worth of swaps maturing within 12 months, whereas in October and November 2019, swaps maturing within 12 months amounted to USD 419 million. By November 2020 swaps had increased to USD 1,415 million. This is indicative of a superior quality of reserves in 2019 compared to 2014 and 2020. (iii) Definitions of Reserves: There are three primary forms of external reserves. Gross Official Reserves (GOR) refer to the sum of government foreign assets and the Central Bank’s foreign assets. Total Foreign Assets (TFA) includes the foreign assets of deposit taking corporations to Gross Official Reserves. Net International Reserves (NIR) refer to gross official reserves minus any reserve related liabilities (which is total central bank debt excluding special drawing rights of the IMF).
Central Bank of Sri Lanka, Weekly Indicators 3rd January 2021, Table 4.3, p.15, available at: https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/statistics/wei/WEI_20200103_e_0.pdf
Central Bank of Sri Lanka, Weekly Indicators 20th February 2015, Table 4.4, p.16, available at: https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/statistics/wei/wei_20150220.pdf
Central Bank of Sri Lanka, Weekly Indicators 29th November 2019, Table 4.3, p.15, available at: https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/statistics/wei/WEI_29_11_2019_e.pdf
Central Bank of Sri Lanka, Annual Report (2015), Table 5.11, p. 165 available at: https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/publications/annual_report/2015/en/9_Chapter_05.pdf
Central Bank of Sri Lanka, Annual Report (2019), Table 5.12, p. 198, available at: https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/publications/annual_report/2019/en/9_Chapter_05.pdf