FOREIGN EXCHANGE REGULATIONS FURTHER RELAXED

Foreign Exchange Regulations have been further relaxed. The aim is to facilitate foreign exchange transactions along with the economic growth.

The Central Bank announced the further relaxation of foreign exchange regulations with effect from the 17th of this month. The Exchange Control Department will allow foreign investors to invest in the domestic unit trusts and will permit the conversion of rupee salaries paid to foreign expatriates, into special Resident Non-National Foreign Currency Accounts. The Central Bank said that under current regulations, resident buyers of Sri Lankan real estate from Non-resident Sri Lankans are required to obtain the prior permission from the Controller of Exchange to make payments to Non-Residents. With a view to facilitate foreign exchange transactions, it has now been decided to grant permission, for Sri Lankan resident buyers to make payments to non-resident Sri Lankans in respect of purchase of real estate properties.
Foreign nationals who are residing in Sri Lanka are presently permitted to open and maintain foreign currency accounts named ‘Resident non-National Foreign Currency Accounts. However, expatriate employees are currently not permitted to credit their earning received in Sri Lankan rupees, into such RNNFC accounts. Supermarkets will be permitted to engage in money changing business. In order to provide additional flexibility to those who wish to change foreign currency through formal channels, it has now been decided to grant money changing licenses to selected supermarket chains open till late night on all days, including holidays.
The Central Bank is of the view that the relaxation of these foreign exchange regulations would enhance investor confidence, strengthen the foreign reserves in the long run and stabilize the foreign exchange market, thereby paving the way to integrating the Sri Lankan economy more closely with the global economy.