The Central Bank of Sri Lanka (CBSL) stands ready to use its full range of macroeconomic tools—fiscal, monetary, and external—to protect the economy from sudden shocks, Governor Dr. Nandalal Weerasinghe said.
Addressing a packed audience of business leaders and government officials at the Sri Lanka Economic and Investment Summit 2025 in Colombo, he sought to ease rising concerns over the economic impact of climate-related events such as Cyclone Ditwah and its aftermath.
Dr. Weerasinghe assured that Sri Lanka is now in a stronger position than during previous crises to withstand unexpected disruptions.
He noted that earlier this year the country successfully navigated an unforeseen external shock because preparedness plans were already in place. Climate-related shocks, he said, are not new, and managing them effectively depends on maintaining strong fiscal, monetary, external, and banking-sector buffers designed specifically for difficult periods.
With these mechanisms activated and state banks already accepting donations from local and international well-wishers, the CBSL has established a solid foundation for timely relief distribution.
He added that short-term fiscal support from the government remains manageable and that the country’s external position is stronger than before, giving authorities sufficient financial buffers if additional support becomes necessary.
On the monetary side, the Central Bank remains prepared to provide liquidity to the banking system, although no such interventions have been needed in recent days.
He highlighted that the CBSL has historically used liquidity support tools during times of stress—injecting over Rs. 250 billion during the pandemic and deploying emergency measures again in 2022 to avert systemic instability.
Sri Lanka’s external buffers have also improved. As of end-October 2025, foreign exchange reserves have risen to around USD 6.2 billion, supported by record forex purchases and a stronger balance of payments.
With the country still exposed to climate risks and global uncertainties, Dr. Weerasinghe emphasized that the CBSL’s priority across fiscal, monetary, and reserve management is to safeguard overall economic stability amid ongoing volatility.
