Central Bank "burns" it's meagre Reserves to defend the currency.
The Central Bank "burned" a massive 19% of it's usable Forex Reserves of USD 2,465 mn as at end-July'23 by selling a whopping USD 467 mn to the Forex market to "defend" the LKR during the month of August'23.
In the meantime, IMF has frowned on their action by warning that *"Reserve accumulation has slowed in recent months"*:
With that warning, analysts expect the CB's LKR defence to be stopped soon, leading to a significant depreciation of the LKR in the coming months.
Reserves as at end-July'23 was USD 3,765 mn, from which the China SWAP of USD 1,300 mn has to be deducted.