Exchange control relaxations-:

More scope for business

The Sri Lankan economy has strength and scope to do business with less regulations in exchange control, said Central Bank Governor Ajith Nivard Cabraal.

He was addressing the media in Colombo to announce the implementation of exchange control relaxations proposed by the budget.

Our external reserve position is very strong with over US$ 7 billion external reserves of CB and another US$ 1.5 billion reserves with the banking sector, he said.

Cabraal said that the new exchange control relaxations will facilitate businesses in both directions.

Accordingly the CB has relaxed foreign exchange regulations relating to investments by Sri Lankans abroad, foreign borrowings by resident companies and investments by non-residents in the domestic market.

New foreign currency accounts have been introduced for a number of vital sectors including tourism and the gem and jewellery industry.

Implementation of these policies is scheduled in two stages; the first set of policies came into effect from November 22, and the other policies from January 1.

The policies implemented from November 22, are as follows: Permission to foreigners to invest in rupee dominated debentures issued by local companies, expeditation of approvals for companies to borrow from foreign sources, permission for foreign companies to open places of business in Sri Lanka, permission to foreigners on tour or business in Sri Lanka to open accounts in foreign currency, permission for importers of gem and jewellery to open accounts in foreign currency, permission for certain banking transactions in foreign currency and Sri Lanka rupee to diplomatic missions, their staff and family members in Sri Lanka, advance payment for imports to be increased from US$ 10,000 to US$ 50,000.

The set of policies that will be implemented from January 1, are as follows: Permission for Sri Lankan residents to invest in equity of overseas companies and make payments in respect of setting up of places of business outside Sri Lanka, permission for insurance companies to invest a part of their assets abroad.

-GW