The Foreign Exchange Act (Act) which was recently enacted by the Sri Lankan Parliament recently will be implemented from November 1.
The Act recognises ‘Authorised Dealers’, ‘Restricted Dealers’ and ‘Dealers for a Specific Purpose’ as being permitted to deal in foreign exchange.
The Central Bank of Sri Lanka (CBSL) will permit a person who is not an authorized dealer, to deal in foreign exchange subject to certain terms and conditions, and such dealers are referred as restricted dealers. In terms of the Act, any person can enter into and deal in foreign exchange in furtherance of current transactions without any Exchange Control restrictions. Payments for current transactions are defined as follows:
Sri Lanka slapped draconian controls on foreign exchange movements after money printing central bank created in 1951 created foreign exchange shortages and currency collapses.
Anyone who tried to protect their savings from effective expropriation by the central bank through currency depreciation was deemed to be committing a crime.
In the last decade in particular the central bank had loosened many of the controls and lifted limits.
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