The Central Bank of Sri Lanka (CBSL) has introduced several measures to ease the pressure on the exchange rate and prevent financial market panic due to the COVID-19 pandemic.
Accordingly, licensed commercial banks and National Savings Bank are directed to adopt the following measures during the next three months, with immediate effect:
- Suspend facilitating the importation of all types of motor vehicles, other than those excluded specifically under Banking Act Directions No.01 of 2020, under Letters of Credit
- Suspend facilitating the importation of non-essential goods specified in Banking Act Directions No.01 of 2020, under Letters of Credit, Documents Against Acceptance and Advance Payment
- Suspend the purchase of Sri Lanka International Sovereign Bonds by licensed banks in Sri Lanka
In addition, Authorised Dealers of foreign exchange are allowed to issue foreign currency notes as travel allowance only up to a maximum of USD 5,000 (or its equivalent in other foreign currency), the release said.
The Central Bank says it will continue to monitor market developments and take further measures as required, while ensuring adequate liquidity in the market in order to facilitate smooth operations and sustain market confidence amidst the COVID-19 outbreak.
The CBSL has introduced the above measures as per the provisions of the Monetary Law Act No. 58 of 1949, the Banking Act No. 30 of 1988, and the Foreign Exchange Act No. 12 of 2017.