Harsha slams CBSL export proceeds conversion rules

Samagi Jana Balawegaya MP Dr. Harsha De Silva criticised the Central Bank of Sri Lanka’s (CBSL) new rules in respect of repatriation of export proceeds into Sri Lanka and conversion of such export proceeds to Sri Lanka Rupees.

The MP took to twitter today (09) to question who wrote the gazette and further stated that professionals want to leave Sri Lanka but those who stay back and earn foreign exchange by way of exporting services are subjected to such rules.

This was in response to a tweet by CBSL Governor Ajith Nivard Cabraal which said, “Remittances by Sri Lankan expats are not subjected to the rule on mandatory conversion of export proceeds, as those remittances are not considered a services export.”

Earlier, the Monetary Board of the Central Bank issued new rules with regard to this, as published in the Gazette Extraordinary No. 2251/42 dated 28 October 2021, repealing the existing rules issued under the Monetary Law Act, No.58 of 1949. 

The new Rules are applicable for both exporters of goods and services in Sri Lanka and require exporters to convert the residual (remaining balance of such export proceeds received), into Sri Lanka Rupees, on or before the seventh (7th) day of the succeeding month, upon meeting following authorized payments.

  • outward remittances in respect of current transactions;
  • withdrawal in foreign currency notes, as permitted;
  • debt servicing expenses and repayment of foreign currency loans;
  • purchases of goods and obtaining services including one-month commitments; and
  • payments in respect of making investments in Sri Lanka Development Bonds in foreign currency up to ten per-centum (10%) of the export proceeds, so received.

Accordingly, with the issuance of these rules, exporters are able to meet all the expenditure relating to export of goods and services, out of their export proceeds.