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Sri Lanka tightens trade rules to boost currency reserves -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – People pass the entrance to the Sri Lanka Central Bank, Colombo (Sri Lanka), March 24, 2017. REUTERS/Dinuka Liyanawatte/File Photo

By Uditha Jayasinghe

COLOMBO, (Reuters) – The Central Bank of Sri Lanka tightened trade restrictions Saturday. It ordered exporters to return foreign currency earnings within 180 days after transactions to increase the country’s foreign reserves.

Sri Lanka faces its most severe financial crisis for over 10 years. It is struggling to pay critical imports such as fuel and food, and has only $2.31 billion in reserves.

This bank has made it mandatory for all exporters of goods or services that they convert foreign currency earnings into Sri Lankan rupees.

In a notification the central bank said that “all licensed banks are required by Sri Lanka to closely monitor receipts for goods”, and added that “any exporter or licensed bank can take legal action to stop non-compliance”.

Friday’s price hike by the state-owned oil company (55 to 95 Rupees, 22-24 Cents per Liter for Most Fuels) was made to compensate losses after Sri Lanka implemented a flexible exchange rate. This allowed the rupee to plunge 30 to 260 Rupees to $1.

($1 = 250.0000 Sri Lankan rupees)

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