• New Order Issued Relaxing Certain Limitations/Suspensions Imposed on Outward Remittances of Foreign Exchange

    With a view to assist and maintain the financial system stability by minimizing the pressure on the exchange rate and preserving the foreign currency reserve position of the country, the Hon. Minister of Finance has issued Orders under Section 22 of the Foreign Exchange Act, No. 12 of 2017 (FEA) since 02.04.2020, to temporarily suspend/limit certain outward remittances.

    Considering the current and expected developments in the domestic foreign exchange market and with a view to further facilitate international transactions, the Hon. Minister of Finance, with the recommendation of the Monetary Board of the Central Bank of Sri Lanka and the approval of the Cabinet of Ministers, has issued a new Order under Section 22 of the FEA. This Order has relaxed certain limitations on outward remittances for capital transactions and removed the restrictions on current transfers of emigrants, while continuing the other suspensions/limitations which were imposed under the previous Order. The new Order is effective for six (06) months from 28.06.2023. The summary of the suspensions/limitations so relaxed are indicated in Table below.

  • AML Compliance Requirements for Gem and Jewellery Sector in Sri Lanka

    The Financial Intelligence Unit (FIU) of the Central Bank of Sri Lanka organized an awareness program for the gem and jewellery sector on “Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Compliance Obligations and New Developments” on July 04, 2023. The keynote address was delivered by Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka/Chairman, National Coordinating Committee on AML/CFT, and Mrs. J M Thilaka Jayasundara, Secretary to the Ministry of Industries, Mr. Viraj De Silva, Chairman of the National Gem and Jewellery Authority (NGJA). Mr. Ajward Deen, President of Sri Lanka Gem & Jewellery Association (SLGJA) and Mr.  U G Chandrasena, President, Lanka Gem Dealers and Miners Association also graced the occasion. The event was participated by over 100 participants from the industry. 

  • Sri Lanka Purchasing Managers’ Index (Manufacturing and Services) - June 2023

    Purchasing Managers Indices indicated an expansion in Services activities and a contraction in Manufacturing activities in June 2023.

    Manufacturing PMI recorded an index value of 47.3 in June 2023, indicating the setback in manufacturing activities. This setback was contributed by subdued performance observed in all the sub indices. 

    Services sector PMI increased further in June 2023 recording an index value of 56.7, the highest reading since January 2022. This was led  by the increases observed in New Businesses, Business Activities and Expectations for Activity. Nevertheless, Backlogs of Works continued to decrease, while employment remained unchanged during the month.

  • The Central Bank releases a Pamphlet on Monetary Policy Implementation in Sri Lanka

    The Central Bank has released a pamphlet on ‘Monetary Policy Implementation in Sri Lanka’ in all three languages, with the aim of enhancing awareness of the general public on the role of the Central Bank in the implementation of monetary policy in Sri Lanka. As a part of the broader communication strategy of the Central Bank, this publication presents a simple discussion on the technical aspects of monetary policy implementation, making it accessible to individuals from various backgrounds and providing valuable insights into monetary policy formulation, implementation, monetary instruments and transmission mechanism, while serving to eliminate any misperceptions on monetary operations among the general public.

  • Non-Renewal of the Money Changing Permits issued to fifteen (15) Money Changers (MCs) for the year 2023

    The Monetary Board of the Central Bank of Sri Lanka has decided not to renew the money changing permits of the 15 MCs listed below for the year 2023, due to the non-compliance with a condition of the permits issued for the year 2022, which was communicated to the respective MCs on 22.02.2023.

  • Real Estate Agents are Advised to Ramp up AML Measures

    The Financial Intelligence Unit (FIU) of the Central Bank of Sri Lanka organized an awareness program for the real estate sector on “Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Compliance Obligations and New Developments” on June 26, 2023. The keynote address was delivered by Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka/Chairman, National Coordinating Committee on AML/CFT, and Mr. W S Sathyananda, Secretary to the Ministry of Urban Development and Housing, Eng. R H Ruvinis, Chairman of the Construction Industry Development Authority (CIDA) and Mr. Hardy Jamaldeen representing the real estate sector also addressed the gathering, while Mr. Sarana Karunaratna, Chairman of the Condominium Management Authority (CMA) also graced the occasion.

  • The Central Bank of Sri Lanka further reduces Policy Interest Rates

    The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 05 July 2023, decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 200 basis points (bps) to 11.00 per cent and 12.00 per cent, respectively. The Board arrived at this decision following a careful analysis of the current and expected developments, including the faster-than-envisaged disinflation process and benign inflation expectations in the domestic economy, with the aim of enabling the economy to reach its potential and stabilising inflation at mid-single digit levels in the medium term, while easing pressures in the financial markets. The Board expects that, with this reduction of policy interest rates by 200 bps, and the reduction of policy interest rates by 250 bps in early June 2023, along with the significant reduction of risk premia on government securities witnessed recently, the market interest rates, particularly lending rates, will adjust downwards adequately and swiftly. Therefore, the banking and financial sector is urged to pass on the benefits of this significant easing of monetary policy by the Central Bank to individuals and businesses, thereby supporting economic activity to rebound in the period ahead.

  • Extension of the Suspension of Business of Perpetual Treasuries Limited

    The Monetary Board of the Central Bank of Sri Lanka, acting in terms of the Regulations made under the Registered Stock and Securities Ordinance and the Local Treasury Bills Ordinance, has decided to extend the suspension of Perpetual Treasuries Limited (PTL) from carrying on the business and activities of a Primary Dealer for a further period of six months with effect from 4.30 p.m. on 05th July 2023, in order to continue the investigations being conducted by the Central Bank of Sri Lanka.

  • CCPI based headline inflation recorded another sharp decline in June 2023

    Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) decreased to 12.0% in June 2023 from 25.2% in May 2023. The decline in the headline inflation is broadly in line with the disinflation path envisaged by the Central Bank of Sri Lanka (CBSL) in April 2023.

  • External Sector Performance - May 2023

    The cumulative trade deficit remained modest so far during 2023. The trade deficit in May 2023 widened, compared to a year ago, for the first time since February 2022.

    Workers’ remittances in May 2023 recorded higher than that of the previous month. Earnings from tourism recorded a robust growth despite being lower than April 2023 due to seasonal affects.

    There was a notable appreciation of the exchange rate by 8.8 per cent during May 2023.

    Foreign investments in the government securities market recorded a notable net inflow during May 2023.

    The receipt of USD 350 million from the Asian Development Bank (ADB) as well as substantial net purchases of forex by the Central Bank from the market, resulted in the gross official reserve level (GOR) increasing to about US dollars 3.5 billion by end May, compared to US dollars 2.8 billion as at end April 2023.

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