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Amnesty to Deposit/Sell Foreign Currency in the Hands of the Public

In order to attract foreign currency held with the public into the banking system, the Minister of Finance has issued an Order granting an amnesty period of 1 month effective from 15.08.2022 for persons in, or resident in, Sri Lanka who hold foreign currency notes in possession to:

i. Deposit into a Personal Foreign Currency Account or into a Business Foreign Currency Account as specified in the Order, as applicable; or 

ii. Sell to an Authorized Dealer (Licensed Commercial Bank or National Savings Bank).

The Central Bank of Sri Lanka Maintains Policy Interest Rates at their Current Levels

The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 17 August 2022, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 14.50 per cent and 15.50 per cent, respectively. In arriving at this decision, the Board considered the latest model-based projections, which point towards a larger than expected contraction in activity and a faster than expected easing of price pressures, compared to the previous monetary policy review. Contractionary monetary and fiscal policies already in place, alongside the measures to curtail non urgent import expenditure, are expected to result in a notable contraction in credit to the private sector and possible upside risks to unemployment in the near term. The Board was of the view that despite headline inflation is projected to remain elevated in the near term, the policy measures taken by the Central Bank and the Government thus far would help contain any aggregate demand pressures, thereby anchoring inflation expectations, along with the anticipated decline in global commodity prices and its passthrough to domestic prices in the period ahead.

The Appearance of Erroneous News Items referring to Statements made by the Governor of the Central Bank of Sri Lanka on various websites and social media platforms

Sinhala translations of articles construed to be authored by the Governor of the Central Bank of Sri Lanka, Dr. Nandalal Weerasinghe, in English, have been circulating in websites and social media platforms these days.

For example, since of late, there has been numerous instances where articles under the topic “Inflation is not a Problem, but a Solution…..This Economic Crisis may be the best thing that happened to us – says Central Bank Governor” or similar topics have been circulating widely in social media.

Please be informed that neither Dr. Nandalal Weerasinghe nor the Central Bank of Sri Lanka is  responsible for the article on the topic of “Inflation is not a problem, but a solution” authored by other individuals under the guise of Dr. Nandalal Weerasinghe or the contents thereof.

Relaxation of the Mandatory Conversion Requirement on Service Export Receipts/Proceeds

With the view of encouraging service exporters to repatriate their export proceeds into the country, the Central Bank of Sri Lanka has withdrawn the mandatory requirement to convert service export receipts/proceeds, that are received in Sri Lanka on or after 12 August 2022. The service exporters may use their export proceeds so repatriated to Sri Lanka for the permitted purposes. The mandatory requirement to receive proceeds of service exports to the country within 180 days from the date of provision of services remains unchanged.  

Sri Lanka Purchasing Managers’ Index - July 2022

Purchasing Managers' Indices for both Manufacturing and Services activities decreased in July 2022.

Manufacturing PMI declined in July 2022, indicating a contraction in manufacturing activities on a month-on-month basis.

Services PMI recorded an index value of 43.0 in July 2022 indicating a contraction in services activities for the fourth consecutive month.

Establishment of the Stakeholder Engagement Committee

The Central Bank of Sri Lanka (CBSL), with a view to broadening its engagement with key stakeholders of the economy, established the Stakeholder Engagement Committee (SEC) by replacing the Monetary Policy Consultative Committee (MPCC) and the Financial System Stability Consultative Committee (FSSCC) of the CBSL that were in operation previously. The SEC is chaired by Prof. Sirimal Abeyratne, Professor in Economics, Department of Economics, University of Colombo and comprises the following 17 eminent personalities from the private sector and academia as members.