Sri Lanka’s Finance Ministry has received the cabinet approval to present amendments to Parliament to ease regulations imposed on foreign exchange as per the guidelines of the International Monetary Fund (IMF), said Cabinet Spokesperson Minister Bandula Gunawardena.  

Speaking at the cabinet briefing held yesterday (6), he said that the Government intends to relax the regulations imposed on the outflow of foreign currency with the build-up of international reserves.

Sri Lanka is bound to lift the administrative measurements taken step by step when the country’s balance of payments reaches a steady stance as per the IMF report on Sri Lanka. 

Adhering to that, the recommendation of the governing board of the Central Bank of Sri Lanka is to implement the steps under a phase-wise plan of releasing foreign exchange limitations applicable to banning the conversion of Sri Lankan rupees to foreign exchange for certain mobile foreign exchange transactions.

In 2021, Sri Lanka suspended making payments through outward investment accounts for the purpose of making investments overseas by persons resident in Sri Lanka in order to maintain financial stability.

Some of the limits imposed under Section 7 of the Foreign Exchange Act No. 12 of 2017 include limiting the eligible migration allowance, limiting the repatriation of funds under the migration allowance through capital transactions and limiting the outward remittances or issuance of foreign exchange for any Sri Lankans living abroad.

Minister Gunawardena said that the limits will be relaxed step by step based on the guidance of the Central Bank.

However, he said it is unlikely that restrictions imposed on vehicle imports will be relaxed anytime soon.

Sri Lanka's official reserves stood at $ 4.4 billion at the end of 2023, an increase of 22% compared to the end of 2022.