Exchange regulations further relaxed

A few new policy measures have been introduced by the Central Bank to relax foreign exchange regulations further. This aims to facilitate the foreign exchange transactions of the growing economy of Sri Lanka, the Central Bank said yesterday.

The new policy measures that will be implemented include the relaxation of restrictions for foreign investments in Unit Trusts.

Considering the advantages in promoting the investment in Unit Trusts and to broaden the investor base in such instruments, the Budget 2011 proposed the removal of exchange control regulations in relation to investments in Unit Trusts. Following such budget proposal, the Central Bank will now allow non-residents and foreign institutional investors to invest in Sri Lankan Unit Trusts.

During the past few years, there has been an increase in the number of Sri Lankan students pursuing their higher education in foreign countries. Such students often need to obtain funds from foreign banking and financial sources to meet tuition fees and living expenditure while they undertake their studies abroad. For such purpose, the current regulation is that they must obtain the prior approval of the Controller of Exchange, which is quite inconvenient since the students are in a foreign country at the time the need arises.

Accordingly, it has now been decided to grant a general permission for Sri Lankan students to obtain Students' Loans from foreign financial institutions.

Under current regulations, resident buyers of Sri Lankan real estate properties from Non-Resident Sri Lankans are required to obtain the prior permission from the Controller of Exchange to make payments to Non-Residents.

With a view to facilitate foreign exchange transactions, it has now been decided to grant the permission under section 7 of Exchange Control Act (ECA) as a general permission for Sri Lankan resident buyers to make payments to non-resident Sri Lankans in respect of purchase of real estate properties.

Permission has also been granted for selected supermarkets to engage in money changing business

It has now been decided to grant permission to convert the salaries and other benefits paid in Sri Lankan Rupees to expatriate employees, into foreign currency and credit such amounts to RNNFC Accounts.

As a further measure, permission will also be granted to transfer funds from accounts maintained in FCBU to the credit of RNNFC, the Central Bank said yesterday.