Sri Lanka extends exchange controls till mid 2021
ECONOMYNEXT – Sri Lanka is extending an exchange control that barred companies and individuals from investing money for another six months from January 2020, the state information office said.
The cabinet of ministers had cleared a proposal from the Minister of Finance to extend the controls which are due to expire in January.
In 2020 Sri Lanka suspended a general permission under the country’s exchange control laws that allowed companies to invest in foreign stocks, securities or sovereign bonds as the rupee came under pressure due to money printing.
Private credit then weakened. But credit has started to pick up since then.
Under the earlier general permission resident listed companies were allowed to invest 2 million dollars a year, unlisted companies 500,000 dollars, a partnership 300,000 dollars or an individual 200,000 dollars.
A company or partnership was also allowed to invest up to 300,000 dollar a year without prior permission from the central bank.
Under the new controls, a company was limited to send up to 20,000 dollars for a branch office or liaison office.
Foreign currency account holders were barred from transferring above 20,000 dollars.
The controls were originally imposed in April as the rupee slid towards 200 to the US dollar.(Colombo/Dec01/2020)