The Central Bank commenced forward intervention to curtail the excess volatility in the forward rates.

Hon. Minister of Finance in consultation with the Monetary Board and with the approval of the Cabinet of Ministers issued regulations to introduce a Special Deposit Account for any Sri Lankan individual resident in or outside Sri Lanka including Dual Citizens, Citizens of other States with Sri Lankan origin and any person resident outside Sri Lanka including funds, corporate bodies, association and other well-wishers with the following special features.

• Minimum tenure: 6 months.
• Interest payable: 1 percentage point and 2 percentage points per annum above the deposit rates applicable on normal deposits for SDAs with a tenure of 6 months and 12 months, respectively, payable at maturity of the deposit.
• Repatriation of Funds: Freely convertible and repatriable outside Sri Lanka on the maturity of the term deposits.

Introduced following temporary regulatory measures on outward remittances for a period of 3 months.

• Suspend the general permission granted to make outward remittances through the Outward Investment Accounts for the purpose of investing overseas by persons resident in Sri Lanka excluding the following;

- investments to be financed out of a foreign currency loan obtained by the investor from a person resident outside Sri Lanka under the provisions of the Foreign Exchange Act, or
- investments to be made to fulfill the regulatory requirement in that country.

• Suspend outward remittances through Business Foreign Currency Accounts or Personal Foreign Currency Accounts held by persons resident in, Sri Lanka other than for the remittances on current transactions.
• Suspend the repatriation of funds under the migration allowance through Capital Transactions Rupee Accounts by emigrants who have already claimed migration allowance.
• Limit the eligible migration allowance for the emigrants who are claiming the migration allowance for the first time has been limited up to a maximum of US dollars 30,000.
• The Monetary Board to grant permission for investments on a case by case basis, when they exceed the limits specified in the general permission granted in Schedule I of the Foreign Exchange (Capital Transactions in Foreign Exchange carried on by Authorised Dealers) Regulations No. 1 of 2017 provided that,

- the proposed investment is to be financed out of a foreign currency loan obtained by the investor from a person resident outside Sri Lanka under the provisions of the Foreign Exchange Act, or
- the proposed investment is to be made to fulfill the regulatory requirement in that country.

With a view to easing the pressure on the exchange rate and the stress on financial markets due to the impact of the COVID-19 pandemic, the Central Bank issued Banking Act Directions to LCBs and National Savings Bank to:

• suspend facilitation of the importation of;

- all types of motor vehicles, other than those excluded specifically under the Banking Act Directions, under Letters of Credit;
- non-essential goods specified in the Directions under Letters of Credit, Documents Against Acceptance and Advance Payment;

• suspend the purchase of Sri Lanka International Sovereign Bonds.

Both measures were introduced for a period of 3 months.