The Monetary Board of the Central Bank issued new Rules, as published in the Gazette Extraordinary No. 2251/42 dated 28 October 2021, in respect of repatriation of export proceeds into Sri Lanka and conversion of such export proceeds to Sri Lanka Rupees, 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.
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Central Bank Issues New Rules on Conversion of Export Proceeds
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Establishing an Advisory Committee for Revival of Failed Licensed Finance Companies
The Monetary Board of the Central Bank of Sri Lanka has established an Advisory Committee to examine possible revival options for failed finance companies.
The Committee comprises four (04) eminent experts from the business sector and is chaired by Mr. Dharma Dheerasinghe, Chairman of CBC Finance Ltd., former Chairman of Commercial Bank of Ceylon PLC and former Deputy Governor of the Central Bank of Sri Lanka. The other members are Mr. Sujeewa Mudalige, Managing Partner of PricewaterhouseCoopers; Mr. Tishan Subasinghe, Managing Director of Moore Stephens Consulting (Pvt) Ltd.; and Mr. Thiyagarajah Dharmarajah, Senior Partner (Audit & Assurance) of Amerasekera & Company, Chartered Accountants.
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CBSL Successfully Completes the Process of Developing and Testing a Blockchain Technology based Shared Know-Your-Customer (KYC) Proof-of-Concept (POC)
The Report of the Blockchain Technology based Shared KYC POC was presented to the Governor of the Central Bank of Sri Lanka (CBSL) Mr. Ajith Nivard Cabraal by the Chairman of the National Payment Council (NPC), Mrs. Yvette Fernando, Deputy Governor of CBSL on 25 October 2021 amidst attendance of CBSL management and officers, and the virtual participation of CEOs and officers of banks that engaged in POC testing and the three POC development teams.
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Ill-Timed and Unacceptable Rating Action by Moody’s Renews Concerns of Subjectivity
The Government of Sri Lanka (GOSL) wishes to express strong displeasure on the recent assessment by Moody’s Investors Service (Moody’s) that led to the rating action, after being placed under review for downgrade three months ago in a similar fashion. Once again, Moody’s irrational rating action with regard to Sri Lanka comes a few days before a key event, namely the announcement of the Government Budget for 2022, and this apparent hastiness and the view expressed during discussions with Moody’s analysts that the nature of the Budget is irrelevant to the financing plans of the Government clearly demonstrates the lack of understanding of such analysts. It also reflects serious governance weaknesses of such agencies, where they systematically overlook the positive developments and expectations in emerging market economies, but attribute much greater weight to downside risks.
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Beware of Financial Scams
The Central Bank of Sri Lanka (CBSL) has been receiving information regarding certain Scams where organized parties seem to be claiming that they have large amounts of foreign and/or local currency credited to their accounts which have been temporarily blocked, and that they would pay handsome amounts to any person who can assist in unblocking such amounts. Sometimes they also show forged documentation that large sums of money had been credited to various accounts and they only need to get the approval of the Central Bank to withdraw such monies.
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LANKAQR Nationwide Rollout Campaign
The LANKAQR Nationwide Rollout Campaign was launched on 25th October 2021 at the Central Bank of Sri Lanka (CBSL) with the aim of popularizing LANKAQR payments among small and medium merchants as well as consumers, as the prevalent digital payment method in the country.
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Progress of Securing Foreign Exchange Inflows as announced in the Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability
The Central Bank of Sri Lanka (CBSL) wishes to provide the following information to investors and the general public on the progress made by the CBSL and the Government in securing foreign exchange inflows as announced in the Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability.
The CBSL and the Government have commenced a series of direct engagements with other Governments, Central Banks, financial institutions and investors.
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Meeting between the Governor of the Central Bank of Sri Lanka (CBSL) and Governor of Qatar Central Bank (QCB)
The Governor of the CBSL, Mr. Ajith Nivard Cabraal had discussions with the Governor of QCB, His Excellency Sheikh Abdulla Bin Saoud Al-Thani, regarding CBSL and QCB collaboration to strengthen SL-Qatar economic ties and measures to mitigate the impact of COVID-19 pandemic on the economies. -
NCPI based Inflation decreased in September 2021
Headline inflation, as measured by the year-onyear (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100)1, decreased to 6.2 per cent in September 2021 from 6.7 per cent in August 2021. This decline was entirely due to the statistical effect of the high base prevailed in September 2020. Meanwhile, Food inflation (Y-oY) decreased to 10.0 per cent in September 2021 from 11.1 per cent in August 2021, while NonFood inflation (Y-o-Y) remained unchanged at 3.0 per cent in September 2021.
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External Sector Performance - August 2021
Increased financial inflows bolstered Gross Official Reserves (GOR) during the month of August 2021, while merchandise exports exceeded US dollars 1.0 billion for the third consecutive month. However, the increase of import expenditure outpaced the increase of export earnings, resulting in an expansion of the trade deficit, compared to a year earlier. Tourist arrivals gathered some momentum in August 2021, recording a notable increase over the previous month, although the numbers remained low. A moderation of workers’ remittances was observed in August 2021. Sri Lanka received the allocation of Special Drawing Rights (SDR) from the International Monetary Fund (IMF) as part of the general SDR allocation in 2021. Further, initial disbursements under the bilateral currency swap arrangement between the Central Bank of Sri Lanka and the Bangladesh Bank were received during August 2021.