Foreign exchange regulations further relaxed

Sri Lanka’s macroeconomic fundamentals have improved during the past few years and the domestic financial sector has become stronger and more resilient. In that background, foreign exchange regulations have been reviewed and relaxed gradually with the objectives of achieving greater efficiency in the conduct of international financial transactions and further facilitating economic activity of the private sector through greater ease of doing business thus enhancing the overall competitiveness of the economy.

In keeping with the above policy framework, new relaxation measures will be implemented with effect from 12th June 2013.

Currently those who wish to open new NRFC/RFC accounts with the existing funds in NRFC/RFC accounts maintained with a different authorized dealer have to obtain the permission of the Controller of Exchange on a case by case basis, to do so. In order to provide greater flexibility for persons operating NRFC/RFC accounts, individuals will now be permitted to open new NRFC/RFC account(s)utilizing funds transferred from existing NRFC/RFC account(s) maintained with another authorized dealer, without first obtaining the permission of the Controller.

Currently, foreign currency loans can be obtained only by a limited category of foreign exchange earners, such as exporters and indirect exporters. Henceforth, banks will be permitted to extend foreign currency loans to all categories of FEEA holders.

As a measure of encouraging investments in immovable property, non-residents will henceforth be permitted to repatriate both capital and capital gains upon sale of immovable property owned and/or developed by the non-resident, provided the property had originally

been acquired and/or developed by such owner through funds remitted into Sri Lanka through international banking channels.