By The Pulseline News Desk
Sri Lanka’s exporters will face stricter requirements to convert foreign currency earnings into local currency under a new set of regulations aimed at strengthening the country’s foreign exchange position and supporting the stability of the rupee.
The gazette issued on Tuesday (9) by Central Bank of Sri Lanka (CBSL) Governor Nandalal Weerasinghe under Section 105 read with Sections 7(1) (c) and Part VI of the Central Bank of Sri Lanka Act, No. 16 of 2023 has announced the latest regulations.
The proposed Repatriation of Export Proceeds into Sri Lanka Rules No. 2 of 2026 amends existing regulations governing how export earnings are managed after being brought into the country. The rules require exporters to convert any unused foreign currency proceeds into Sri Lanka rupees by the 10th day of the following month after meeting specified foreign currency obligations.
The move comes as authorities continue efforts to safeguard foreign exchange liquidity following years of economic turbulence that exposed vulnerabilities in the country’s external sector.
Under the amended rules, exporters may continue to use foreign currency earnings for a range of approved purposes before conversion. These include payments related to export operations, servicing approved foreign currency loans, paying dividends to non-resident investors, salaries of expatriate employees, business travel expenses, and certain investments in government-issued foreign currency debt securities.
However, any remaining balance must be converted into rupees within the stipulated timeframe.
Financial analysts say the amendment reflects a broader policy objective of ensuring that export-generated foreign exchange circulates through the domestic banking system rather than remaining idle in foreign currency accounts.
“The regulations are designed to improve the availability of foreign exchange in the formal financial sector while still allowing exporters to meet genuine operational requirements,” said an economist familiar with foreign exchange regulations.
A notable feature of the amendment is its extension to indirect exporters, businesses that supply goods or services to exporters and receive foreign currency payments from them. Such entities will now be subject to similar conversion requirements, ensuring that foreign currency received through export-linked transactions is also brought into the domestic economy.
Indirect exporters may retain foreign currency only for approved uses such as business-related payments, debt servicing, travel expenses, and certain investment activities. Any residual balance must likewise be converted into rupees by the tenth day of the following month.
Business groups are expected to closely examine the practical implications of the revised framework, particularly for firms that rely heavily on foreign currency transactions and maintain ongoing overseas commitments.
Supporters of the measure argue that it promotes greater transparency and strengthens oversight of export proceeds, while critics may raise concerns about reduced flexibility in foreign currency management.
The regulations will come into force upon approval by Parliament.
The latest amendment represents another step in Sri Lanka’s continuing efforts to balance export sector competitiveness with the country’s broader macroeconomic and foreign exchange objectives.
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