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Re-appointment of Mr Sanjeeva Jayawardena, President’s Counsel to the Monetary Board of the CBSL

Mr Sanjeeva Jayawardena, President’s Counsel, has been re-appointed to the Monetary Board of the Central Bank of Sri Lanka (CBSL), for a fresh term of 6 years, up to June 2027, by His Excellency the President Gotabaya Rajapaksa, consequent to his nomination being approved by the Parliamentary Council.

Mr.Sanjeeva Jayawardena is the first President’s Counsel to serve on the Monetary Board of the CBSL.

He presently serves as the Chairman of the Monetary Board Level, External Debt Monitoring Committee and as the Chairman of the Board Risk Oversight Committee. He also chairs the Ethics Committee of the CBSL.

Local Companies Permitted to Invest in the International Sovereign Bonds in the Secondary Market

In terms of the provisions of the Foreign Exchange Act, No. 12 of 2017, the Hon. Minister of Finance has issued Regulations, with the approval of the Cabinet of Ministers, to permit companies incorporated in Sri Lanka under the Companies Act, No. 7 of 2007 (excluding companies engaged in finance business as per the Finance Business Act, No. 42 of 2011) to purchase International Sovereign Bonds issued by the Government of Sri Lanka (ISBs), in the secondary market.

According to the above Regulations, companies can invest in ISBs utilizing 50% of the foreign currency borrowed from a person resident outside Sri Lanka in terms of the prevailing Foreign Exchange Regulations and subject to the following terms and conditions.

Additional interest up to 2% per annum extended for 2 years for Special Deposit Accounts (SDAs)

Considering the potential of Special Deposit Accounts (SDAs) to attract a substantial amount of foreign exchange into the country and the resultant positive impact on the foreign currency reserve position of the country and the overall economy, the Hon. Minister of Finance with the recommendation of the Monetary Board of the Central Bank of Sri Lanka (CBSL) has decided to grant permission to rollover SDAs up to an accumulated period of 24 months from the initial date of placing such deposits. SDAs so rolled over will be eligible for additional interest up to 2% per annum offered by the Government.

The Government of Sri Lanka introduced the SDAs on 08 April 2020 to seek assistance for the national effort to overcome the effects of COVID-19 pandemic in the country. Accordingly, as at 02 July 2021, total deposits received into SDAs amounted to approximately USD 458 million.

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 07 July 2021, 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 4.50 per cent and 5.50 per cent, respectively. The Board arrived at this decision after carefully considering the macroeconomic conditions and expected developments on the domestic and global fronts.