"The overall balance of payments deficit of US dollars 1,102 million during the fourth quarter of 2011 is estimated to have narrowed down significantly to US dollars 251 million in the first quarter of 2012," it said.
By end of March 2012, gross official reserves amounted to USD 5,730 million.
The total external reserves, which include gross official reserves and foreign assets of commercial banks, amounted to USD 6,957 million.
In terms of months of imports, gross official reserves and total external reserves by end March 2012 were equivalent to 3.3 months and 4.0 months, respectively, the central bank said.
The widening trade deficit in February forced the government to take corrective measures to curb imports.
Prohibitive import tariffs were introduced in respect of motor vehicles.
A very critical reserves situation in 2009 at the end of the war with the LTTE forced the government to enter a bail out package of USD 2.6 billion with the IMF.