Sri Lanka orders exporters to convert 25-pct of forex earnings

ECONOMYNEXT – Sri Lanka’s Central Bank has ordered exporters to covert 25 percent of foreign exchange
earnings with immediate effect.

Exporters also have reptriate proceeds within 180 days of shipment.

Sri Lanka had earlier asked banks to sell 10 percent of converted remittances to the central bank.

Related

Sri Lanka banks required to sell 10-pct of forex remittances to the central bank

The full statement is reproduced below:

The Monetary Board has issued Rules as published in the Gazette Extraordinary No. 2215/39 dated 18.02.2021 in respect of receipt of export proceeds into Sri Lanka and conversion of such export proceeds into Sri Lanka Rupees.

Accordingly, following Rules are imposed with effect from 18 February 2021 until further notice.

1. Every exporter of goods shall:

(i) receive the export proceeds in Sri Lanka in respect of all goods exported within hundred and eighty (180) days from the date of shipment, and

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i (ii) forthwith submit all related documentary evidence on each and every receipt of export proceeds in respect of every export of goods made, to the respective Licensed Commercial Bank or the Licensed Specialized Bank (hereinafter referred to as “Licensed bank”) that receives such proceeds in Sri Lanka.

2. Every exporter of goods shall, immediately upon the receipt of such export proceeds into Sri Lanka as required under this Rule, convert twenty five per centum (25%) from and out of the total of the said exports proceeds received in Sri Lanka into Sri Lanka Rupees, through a licensed bank.

3. The requirement of converting the aforesaid twenty five per centum (25%) from and out of the export proceeds received in Sri Lanka, shall continue, until any other percentage as may be determined by the Monetary Board, from time to time.

4. All licensed banks shall be required to mandatorily monitor, strictly, the receipts of exports proceeds in Sri Lanka within the period as stipulated and the conversion of such proceeds as required in this Rule, and shall maintain all documentary evidence relating or in connection thereto.

5. All licensed banks shall submit reports to the Director of the Foreign Exchange Department of the Central Bank of Sri Lanka as may be required from time to time and provide unencumbered access to the officers of the Central Bank of Sri Lanka as may be authorized by the Governor or the Deputy Governor, as the case may be, to inspect or examine the records maintained under the Rule, and to examine and review all actions taken by such licensed banks in securing full and strict compliance with these Rule.

6. This Rule shall apply in respect of all goods exported and where the hundred and eightieth (180th) date from the date of the shipment and exports proceeds received to Sri Lanka on any date after 18 February 2021.

7. These Rules shall come into force with effect from 18 February 2021.

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  1. Good directive. Some of the very large exporters does not bring the ForEx earnings to SL. These are held in holding company accts in Singapore, Dubai and etc. Only the money needed to run the operations in SL is remitted to the country. This is while enjoying tax benefits and BOI privileges given by the Govt.

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