ECONOMYNEXT – Sri Lanka’s Central Bank ordered exporters to convert their dollars within one month, down from three months amid increasing depreciation pressure on the currency. Dealers said the move aimed to curb the currency fall.
Two dealers said the Central Bank had repeatedly stated to bring down the dollar conversion time if exporters delayed their conversions, waiting for the rupee to fall further.
Central Bank Governor Nandalal Weerasinghe in an extraordinary gazette ordered “every exporter of goods, who receives export proceeds in Sri Lanka, during any calendar month…, shall mandatorily convert residual of the export proceeds received in Sri Lanka, into Sri Lanka Rupees upon utilizing such proceeds only in respect of the below mentioned authorized payments, on or before the tenth (10th) day of the following month.”
The new measure came to effect immediately.
Currency dealers said the move will help to stabilize the rupee temporarily.
“This will strengthen the rupee a bit for a short period. But there is import demand for dollars in the market. So the dollar coming from the export conversion will be gone soon,” a Colombo-based dealer said asking not to be named.
The Central Bank’s latest move comes after using US$211 million in May to defend the currency, which touched a four-year low on May 21.
The rupee is under downward pressure due to higher importer demand for dollars in the market amid increased fuel and vehicle import bills.
The Central Bank also has reversed its dovish monetary policy stance and raised the overnight policy rate (OPR) by 100 basis points on May 26 to prevent demand-driven inflation.
The has fallen around 8 percent so far this year and importers have been booking forwards amid fears of further depreciation while exporters have been waiting for the currency to settle to convert their dollar proceeds.
Some analysts have cited the excess rupee liquidity resulted from the Central Bank aggressive dollar purchase to boost the reserves at lower interest rates as the key reason for pick up in imports, which has led to fall in the rupee against U.S. dollars. (Colombo/June 10/2026)