COLOMBO: Sri Lanka's central bank on Monday defended its foreign exchange reserve management after the main opposition party criticised it for an investment in Greek government bonds last year.
Local media at the weekend reported the central bank had lost up to $22 million last year due to purchases of Greek government bonds, with Sri Lanka's main opposition United National Party (UNP) saying the risk was unnecessary.
But Central Bank Governor Ajith Nivard Cabraal said the country's reserves yielded a return of $430 million in 2011 and the central bank, in a separate statement, said the yield was after provision made for the Greek bond loss.
"We have made a 6.5 percent average return on our reserves," Cabraal told Reuters. "We are accountable and we have been able to generate the required return much more than we ever had been able to provide in the past."
The $59 billion economy recorded a $1 billion deficit in balance-of-payments as its reserves fell 10 percent to $5.96 billion in 2011. The central bank spent more than $2.7 billion in the second half of 2011 to defend the currency.
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