Sri Lanka tightens trade rules to boost currency reserves
Sri Lanka is tackling its worst financial crisis in over a decade, struggling to pay for critical imports including fuel, food and medicines and with just $2.31 billion of reserves
Sri Lanka's Central Bank tightened trade restrictions on Saturday, ordering exporters to repatriate foreign exchange earnings within 180 days of transactions in a bid to improve country's depleting foreign exchange reserves.
Sri Lanka is tackling its worst financial crisis in over a decade, struggling to pay for critical imports including fuel, food and medicines and with just $2.31 billion of reserves.
The bank's moves include mandatory currency conversion for exporters of goods and services to change their foreign exchange earnings into Sri Lankan rupees.
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"All licensed banks are required to strictly monitor receipts of goods to Sri Lanka," the central bank stated in a notification, adding that it "has the right to initiate action against non-compliance by any exporter or licensed banks".
The state-run oil company on Friday increased prices by 55 to 95 rupees (22-24 cents) per litre for most fuels to offset losses after Sri Lanka introduced a flexible exchange rate that saw the rupee plunge 30% to 260 rupees to the dollar.
($1 = 250.0000 Sri Lankan rupees)
