Dollar crisis : 14 key facts from CBSL Governor’s presser

April 29, 2022 at 5:05 PM

The Governor of the Central Bank of Sri Lanka Dr. Nandalal Weerasinghe has outlined the measures to be taken to address the current economic crisis in Sri Lanka. 

He provided a breakdown of the necessary steps, including dollar payments, during a media briefing held today.

Following are 14 key facts from the Governor’s press conference:

  1. The Finance Minister to announce the fiscal consolidation plan next week.
  2. Measures to be implemented aimed at discouraging the demand for undiyal/hawala system. 
  3. In the process of taking steps to increase dollar inflows into the banking system and address the issue of hawala/undiyal informal transactions outside the banking system. 
  4. Regulations will be imposed to restrict customs clearance of goods who have not used banking channels and have sent US dollars out through hawala or undiyal system.
  5. Banks have been asked to provide dollars and enable dollar payments for education and health needs.
  6. Issue in the banking sector at the moment identified as foreign currency liquidity and not rupee liquidity issues.
  7. The depreciation pressure on the rupee is on the decline along with a drop in imports. 
  8. Payment in US dollars cannot be demanded unless they have special permission under the prevailing law, as “Sri Lanka’s currency is still the rupee”
  9. The process charging tourists in dollars to be abolished soon as it inconveniences foreign visitors.
  10. All expatriates requested to send foreign currencies through bank network.
  11. Ease many restrictions related to dollar transactions when dollar inflows stabilises.
  12. The Asian Clearing Union agrees to postpone the country’s due payments until end of this year.
  13. All creditors to be treated equally in debt restructuring including China, India, Paris Club, Non Paris Club. Debt repayment will not commence until the creditors agree on debt restructuring.
  14. Negotiations will commence with China on its willingness to refinance its debt repayment and only once decided on debt restructuring.