Import expenditure continued to expand, in spite of high earnings from exports exceeding US dollars 1.0 billion for the eighth consecutive month, thereby widening the deficit in the trade account in January 2022, compared to January 2021. Tourist arrivals showed a notable recovery in January 2022 over the same month in the previous year, while moderation of workers’ remittances was observed in January 2022. Meanwhile, Sri Lanka successfully settled the International Sovereign Bond (ISB) of US dollars 500 million in January 2022. The financial account of the balance of payments strengthened during the month with the receipt of the SAARCFINANCE swap facility from the Reserve Bank of India. The weighted average spot exchange rate, which remained in Rs.
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External Sector Performance - January 2022
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Central Bank suspends Money Changing permit issued to Prasanna Money Exchange (Pvt) Ltd
Considering the complaints received from general public that Prasanna Money Exchange (Pvt) Ltd is offering higher exchange rates, the Department of Foreign Exchange of the Central Bank conducted an on-site investigation at the Prasanna Money Exchange (Pvt) Ltd on 30.03.2022. As per the investigation, it was observed that the Prasanna Money Exchange (Pvt) Ltd had offered higher exchange rates and thereby attempted to purchase foreign currency from its customers at higher rates than the exchange rates offered to them by Licensed Banks and that they were in violation of the Directions issued to Authorized Money Changers under the Foreign Exchange Act No. 12 of 2017 (FEA).
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NOTICE TO THE PUBLIC – MONEY CHANGERS
The public is hereby notified that in terms of the provisions of the Foreign Exchange Act, No. 12 of 2017, Money Changers have been prohibited from offering higher exchange rates to customers beyond the exchange rates offered to such Money Changers by Licensed Banks.
The Money Changers have been informed that their licenses would be suspended/ revoked if they transact any foreign currency transactions at rates beyond the rates stipulated by Licensed Banks.
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The CBSL’s Comments on the IMF Article IV Report
The International Monetary Fund (IMF) has published its Article IV Staff Report on Sri Lanka. The Article IV process included;
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Clarification Regarding the Forex Sales by Banks to the Central Bank of Sri Lanka
The Central Bank of Sri Lanka (CBSL) wishes to clarify that the recent increase of the percentage of foreign exchange sales by banks to the CBSL from 25% to 50%, effective from 21.03.2022, is exclusively applicable to banks and that will not have any impact on the prevailing requirements for the foreign exchange earnings of expatriate workers and export proceeds of exporters.
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Statement from the Central Bank of Sri Lanka
The Ministry of Finance and the Central Bank of Sri Lanka wish to assure the public and all other stake holders that the banking system is stable, and that the operations of the State Banks are being carried out smoothly, contrary to statements made otherwise.
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The Central Bank of Sri Lanka issues a Circulation Standard Commemorative coin to mark 150th Anniversary of Faculty of Medicine, University of Colombo
The Central Bank of Sri Lanka (CBSL) issued a circulation standard commemorative coin with a face value of Rs. 20 to mark the 150th Anniversary of Faculty of Medicine, University of Colombo in recognition of its contribution to the nation as the first medical faculty in the country. This coin was issued at the request of Faculty of Medicine, University of Colombo.
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The Central Bank of Sri Lanka issues a Circulation Standard Commemorative Coin to mark 150th Anniversary of Census of Population and Housing in Sri Lanka
The Central Bank of Sri Lanka (CBSL) issued a circulation standard commemorative coin with a face value of Rs. 20 to mark the 150th Anniversary of Census of Population and Housing (CPH) in Sri Lanka, in recognition of an event that contributes to the socio-economic development of the country. This coin was issued at the request of Department of Census and Statistics (DCS) of Sri Lanka.
The first CPH in Sri Lanka was conducted in 1871 and the year 2021 marks its 150th Anniversary. The 15th CPH was originally planned to be conducted in 2021, concurrently with its anniversary. However, due to the COVID-19 pandemic 15th CPH has been postponed till 2022 - 2023.
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Proposed additional incentive scheme for expatriate workers’ remittances and exporters to be rescinded
As a result of the decision of the Central Bank of Sri Lanka to allow flexibility in the exchange rate, the exchange rate seems to have now reached a level surpassing the level of incentives that was intended to stimulate expatriate workers’ remittances and conversion of export earnings.
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Condominium Market Survey - Fourth Quarter 2021
The Condominium Property Volume Index has increased significantly during Q4, 2021 with a notable increase of 49.0 per cent compared to Q4, 2020 and with a growth of 48.4 per cent compared to Q3, 2021. In the backdrop of inflationary pressures and the relatively low levels of return earned on traditional investment avenues, investors are moving toward non-traditional investment avenues, among which investment on apartments is becoming increasingly popular. Further, an observable shift is seen in the price categories of transactions. While 77 per cent of transactions were priced below Rs.25 million a year ago, it has reduced to 49 per cent in Q4, 2021. Moreover, the Single Condominium projects in the Colombo district remain to be the most preferred category in Q4, 2021.