The Committee on Public Finance (COPF) has taken up for discussion a recent decision by the Central Bank of Sri Lanka to shorten the period allowed for exporters to convert their foreign exchange earnings into Sri Lankan rupees.
The matter was discussed at a meeting of the committee chaired by Member of Parliament Harsha de Silva at Parliament on June 9.
Central Bank officials told the committee that the measure was introduced in response to exchange rate volatility, instability in the foreign exchange market and concerns over foreign currency liquidity.
Officials said the decision was a short-term policy measure aimed at stabilizing the exchange rate and improving foreign exchange supply, adding that the requirement would be relaxed once market conditions become more stable.
However, the committee noted that the move could potentially undermine market confidence and contribute to increased volatility in the foreign exchange market.
The committee also approved the “Repatriation of Export Proceeds into Sri Lanka Rules No. 2 of 2026”, published in Extraordinary Gazette No. 2492/10 issued on June 9 under the Central Bank of Sri Lanka Act.
Under the new rules, exporters who repatriate export proceeds to Sri Lanka in any given month may use those funds only for authorized payments. Any remaining balance must be converted into Sri Lankan rupees on or before the 10th day of the following month.
The revised regulation replaces the three-month conversion period introduced in 2024, significantly reducing the time exporters can retain foreign currency earnings before converting them into rupees. (Newswire)
