Sri Lanka changes trade rules to increase foreign exchange reserves

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Sri Lankan central bank measures include mandatory currency conversion for exporters of goods and services to convert their foreign exchange earnings into Sri Lankan rupees

The Central Bank of Sri Lanka tightened trade restrictions on Saturday, ordering exporters to repatriate foreign exchange earnings within 180 days of transactions in a bid to boost the country’s depleting foreign exchange reserves.

Sri Lanka is tackling its worst financial crisis in more than a decade, struggling to pay for essential imports including fuel, food and medicine, and with just $2.31 billion in reserves.

The bank’s measures include compulsory currency conversion for exporters of goods and services to convert their foreign exchange earnings into Sri Lankan rupees.

“All licensed banks are required to strictly monitor the receipt of goods in Sri Lanka,” the central bank said in a notification, adding that it “has the right to take action in the event of non-compliance by any exporter or approved bank”.

The state-owned oil company on Friday raised prices by 55 to 95 rupees (22-24 cents) a liter for most fuels to make up for losses after Sri Lanka introduced a flexible exchange rate that saw the rupee plunge from 30% at 260 rupees for one dollar. .

  • Reuters with additional editing by Sean OMeara

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Sean O’Meara

Sean O’Meara is an editor at Asia Financial. He has been a newspaper man for over 30 years, working for local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. Passionate about football, cricket and rugby, he is particularly interested in the financing of sport.

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