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Sri Lanka’s central bank invites public to open forex accounts

ECONOMYNEXT – Sri Lanka’s central bank is inviting members of the public who have in their hand legitimately acquired foreign currency to open foreign currency accounts in bank and deposit them.

Sri Lankan citizens are allowed to hold up to 15,000 dollars worth of foreign currency in hand if it was brought back from abroad as salaries after working, payments for goods or services, withdrawn their own forex account or taken from a bank to travel abroad and not used.

The central bank said a foreign currency account could be opened with the money, which will be pay interest and also be used for future foreign travel or for permitted foreign currency transactions.

People who already have accounts could deposit the cash in their banks and earn interest.

Banks generally pay around 2 to 3 percent for forex accounts. However customers say if they try to withdraw the money in rupees, some banks may charge 2 to 3 years worth interest as a commission from the day’s published exchange rate.

Meanwhile the central bank said any foreign exchange in hand could also be used to pay bills at approved hotels.

A person could also hold higher amounts higher than 15,000 dollars for up to 90 days after returning from abroad before depositing.

In gazette notices Sri Lanka has earlier required returnees to declare at customs of more than 15,000 is brought the country.

A person in Sri Lanka who supplies services to a person residing outside Sri Lanka or for selling goods in duty free services could also receive foreign exchange but they should be deposited in a foreign exchange account within 7 days.

In most countries citizens are prohibited from holding competing foreign currency to enforce a money monopoly of the state, and citizens are not allowed to hold significant amounts of cash.

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The central bank will then print money, depreciate the real value of the domestic currency and effectively expropriate the people.

When central banks prints money and does not defend the currency and domestic currency depreciate steeply people in some countries people start transacting also write contracts including salaries in foreign currency to stop the state from impoverishing them which is known as dollarization.

Residents of Colombo Port City is expected to receive dollar salaries and be protected from the liquidity injections and depreciation. Chinese workers in construction sites and other foreign workers are also usually paid in dollars and are protected from liquidity injections and depreciation. (Colombo/Apr02/2021)

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