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Wednesday October 5th, 2022

Sri Lanka exporters say committed to repatriating funds

ECONOMYNEXT – Sri Lanka’s exporters are committed to following central bank regulations and repatriating export proceeds in time, an industry grouping said following warning by the regulator amidst the worst currency crises in the history of the agency.

The Exporters Association of Sri Lanka said it supports the central bank in its measures to “strictly monitor and measure ensure compliance with all regulations on foreign exchange transactions, including repatriation requirements of export proceeds, conversions and mandatory sales to the CBSL”

“The EASL is committed to ensuring that its members abide by the requirements of the law in respect of the repatriation of export proceeds and the surrender of residual earnings.

“We have communicated this to our membership and willing to support the CBSL in any way possible at this time.”

Critics have blamed the mandatory sales to the central bank (a strong side convertibility undertaking which should only be imposed on a peg facing upward pressure to depress it with new liquidity) and too-low rates for the steep fall of the currency in a March failed attempt to float the currency.

The central bank however later raised rates to kill private credit, slow outflows and help stabilize the external sector. Imports have fallen steeply along with private credit, but some interventions are continuing at 360 with borrowed dollars and the surrender rule is also in place.

Forex shortages are a problem associated with soft-pegged exchange rate regime with anchor conflicts and are absent in clean floats and currency boards/hard pegs.

The full statement is reproduced below:

Press Release

Exporters’ Association of Sri Lanka commits to support CBSL in ensuring compliance with regulations on repatriation of export proceeds

The Exporters’ Association of Sri Lanka (EASL) welcomes the measures taken by the CBSL, as outlined in their communication of 29thJuly titled “Importance of Fair Play by all Stakeholders of the Economy in countering the current unprecedented economic crisis”.

As a responsible association, the EASL supports the CBSL in its measures to “strictly monitor and measure ensure compliance with all regulations on foreign exchange transactions, including repatriation requirements of export proceeds, conversions and mandatory sales to the CBSL”

The EASL is committed to ensuring that its members abide by the requirements of the law in respect of the repatriation of export proceeds and the surrender of residual earnings.

We have communicated this to our membership and willing to support the CBSL in any way possible at this time.

It’s important that exporters abiding by the regulations are recognized by the CBSL and agree that offending companies should be dealt with under the provisions of the law.

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