brand logo

Measures implemented to minimize foreign exchange risk

23 Sep 2020

The Cabinet of Ministers yesterday (22) granted the approval for the measure tabled by the Prime Minister as the Minister of Finance to take measures to minimize the foreign exchange risk that may occur to the licensed commercial Banks. The Central Bank of Sri Lanka has identified the need to facilitate non-resident investors to invest in government securities and other sectors and encourage the inflow of foreign currency into the country. Therefore, the approval to introduce US Dollars/Sri Lankan Rupees buying and selling exchange facilities for a period of one to two years has been given by the Monetary Board of the Central Bank of Sri Lanka. The measures to be implemented are:
  • Conducting the initial foreign exchange transaction and subsequent exchange transactions at the same exchange rate.
  • Concerning the foreign exchange transactions prior to the maturity of the investment, granting permission to exchange at the prevailing foreign exchange rate subject to a penalty.
  • This facility is applicable only if foreign exchange inflows into the country a1d subject to a minimum of US $ 25 million and a maximum of US $ 1000 million.
  • In the case of depreciation of the exchange rate of the US Dollars/ the Sri Lankan Rupees during the implementation of this measure, the Central Bank of Sri Lanka will compensate the loss incurred to the Central Bank of Sri Lanka when transferring its dividends to the Treasury in the future as the loss that could be incurred to the Central Bank of Sri Lanka enable to consider as a cost to the Treasury.


More News..