COLOMBO, June 2 (Xinhua) -- Sri Lanka's trade deficit narrowed to 549 million U.S. dollars in March compared to 592 million U.S. dollars in the same period last year amid shocks to the external sector from the COVID-19 pandemic, the Central Bank of Sri Lanka (CBSL) said on Monday.

"The COVID-19 pandemic and the imposition of a partial lockdown in Sri Lanka in the second half of March 2020 affected external sector performance," the CBSL said in a press release.

"Breakdown in supply and demand chains along with the interruption of domestic production processes resulted in a notable decline in merchandise exports as well as merchandise imports. However, with a greater decline in the expenditure on imports compared to the decline in earnings from exports, the trade deficit narrowed over the same period in 2019," the statement added.

Income from tourism and worker remittances, two of Sri Lanka's largest foreign exchange earners, saw a steep year-on-year decline of 70.8 percent and 13.9 percent respectively. Earnings from tourism dropped to 135 million U.S. dollars while worker remittances dropped to 492 million U.S. dollars.

The report showed a net outflow of 261 million U.S. dollars in foreign investment in rupee-denominated government securities in March, 2020. However, the country saw a gross inflow of 588 million U.S. dollars in long-term loans in the same period, including a syndicated loan facility of 500 million U.S. dollars from the China Development Bank.

The CBSL said the total foreign assets, including official reserves and foreign assets of the banking sector, stood at 10.7 billion U.S. dollars as at end-March 2020 -- equal 6.5 months of imports. Enditem

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