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Debt Moratorium for COVID - 19 Affected Businesses and Individuals

With a view to meeting the challenges faced by businesses and individuals due to the second wave of COVID-19, the Central Bank of Sri Lanka (CBSL) has required licensed banks to extend a debt moratorium to COVID-19 affected businesses and individuals for a maximum period of six months commencing from 01 October 2020. Eligible borrowers may request for the moratorium on or before 30 November 2020. The salient features of the scheme are as follows:

External Sector Performance - September 2020

Sri Lanka’s external sector recovered further in September 2020, supported by the continued improvement in the trade deficit, a notable increase in workers’ remittances and the resultant stability in the domestic foreign exchange market. The trade deficit improved in September 2020, compared to a year earlier, with a more than expected rebound in merchandise exports and a reduction in merchandise imports during the month. In September 2020, workers’ remittances, recorded the highest year-on-year growth since end 2011. In the financial account, the government securities market recorded a marginal foreign investment inflow during the month, while the Colombo Stock Exchange (CSE) recorded outflows. Net inflows to the domestic foreign exchange market eased the pressure on the exchange rate and enabled the Central Bank to absorb foreign exchange, on a net basis, to build up gross official reserves. Reflecting these developments, the Sri Lankan rupee appreciated during the month of September 2020.

Central Bank Extends the Grace Period of 4% Working Capital Loan Scheme from 6 Months to 9 Months

Having identified the national importance of revamping the businesses affected by COVID-19 pandemic, the Central Bank of Sri Lanka (CBSL), in consultation with the Government of Sri Lanka, implemented Saubagya COVID-19 Renaissance Loan Scheme Facility in 3 phases to provide working capital loans at the interest rate of 4% per annum, with a repayment period of 24-months, including a grace period of 6-months.

However, it is observed that most of the borrowers have experienced difficulties in revamping their businesses as expected, due to the second wave of COVID-19 pandemic. Therefore, having considered the importance of facilitating and encouraging borrowers to repay the loans without any failure, the CBSL decided to extend the grace period applicable for the loans registered under Saubagya COVID-19 Renaissance Facility by additional three (03) months, upon the written request made by the borrowers.

Accordingly, beneficiaries of these working capital schemes who wish to receive a grace period of 9 months are required to send a written request to the relevant bank.

The Central Bank publishes 'Recent Economic Developments: Highlights of 2020 and Prospects for 2021'

Today, the Central Bank of Sri Lanka released its report on “Recent Economic Developments: Highlights of 2020 and Prospects for 2021”. The Report can be downloaded from the website of the Central Bank of Sri Lanka in all three languages.*

In addition to the regular update on economic developments, the Report also presents an update to the medium term macroeconomic projections published by the Central Bank in April 2020, taking into account the information available up to mid-October 2020. The publication of the Report this year comes at a crucial juncture as the economy continues to navigate through multipronged socio-economic challenges and uncertainties caused by the COVID-19 pandemic.