Foreign exchange transactions relaxed

The Central Bank of Sri Lanka yesterday announced further relaxation of foreign exchange transactions with the following measures to be implemented with effect from March 11 in relation to foreign exchange transactions.

A Sri Lankan resident who is earning foreign exchange from investments abroad as approved by the Central Bank, engaged in providing international professional services in Sri Lanka or abroad, engaged in any occupation abroad or who have proceeded outside Sri Lanka for education and/or for medical treatment and exporters of goods will be permitted to open and maintain bank accounts abroad, the bank said.

The bank said that forward contracts in foreign currency to cover foreign exchange transactions related to trade in goods and services, remittances and approved foreign lending and borrowings, will also be permitted.

Under these measures the present 100 percent margin deposit requirement against advanced payments on the invoice value of selected items to be imported, will be removed.

The suspension on the pre-payment of import bills will be lifted.

Under this the existing different investment accounts, namely Share Investment External Rupee Accounts (SIERA), Treasury Bond Investment External Rupee Accounts (TIERA), Treasury Bill Investment External Rupee Accounts (TIERA-2), and Treasury Bill/Bond Investment External Rupee Accounts Deshabhimani (TIERA -D) maintained by non-residents in commercial banks will be permitted to be unified.

The unified account will be renamed as Securities Investment Account (SIA), the bank said.

The Central Bank states that the relaxation of these specific exchange controls would contribute to further improve investor confidence and stabilize the foreign exchange market, thereby paving the way to further integrate the Sri Lankan economy with the global economy.