“Foreign Currency To Be Immediately Converted To LKR” - Central Bank 
Posted 8,November

By Chaveendra Dunuwille

In Local News

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In a move that sent shockwaves in the local business sector, the Central Bank of Sri Lanka ordered importers, exporters, and those engaged in receiving funds for goods & services to convert their foreign currency earnings to LKR. 

While the directive also applies for those who provide professional, vocational, occupational, and business services overseas, certain authorized deductions are permitted for imported inputs and loans, business travel, and a few others. The Central Bank also informed all commercial banks to ensure that these conversions take place monthly. 

Officials expressed concerns that such ambiguous regulations should not exist in a free market and give off the impression that the market is being overly regulated. It was also stated that moves such as this will further discourage remittance, 

The new set of rules by the Central Bank seems to be in response to allegations that exporters are hoarding foreign currency in anticipation of further depreciation of the Sri Lankan rupee against the USD, which has been artificially pegged at LKR 203-204.