percent of export proceeds not repatriated
The Central Bank has announced a new export proceeds monitoring
scheme from January after estimates that some 10-12 percent of export
earnings are not brought back to the island at a time when the government
is trying hard to shore up its foreign exchange reserves.
export proceeds monitoring mechanism that will gather data on a
quarterly basis will improve the foreign exchange management system,
the bank has told exporters.
information will help us improve our compilation of balance of payments
statistics and analyse external developments relating to the performance
of Sri Lankan exports," Controller of Exchange H.A. G. Hettiarachchi
stressed that the reporting scheme was launched purely to collect
more accurate data on export proceeds to compile balance of payments
statistics. "There's no intention of altering existing provisions
for exporters under the Exchange Control Act," he said. The
monitoring scheme had been discussed with the Exporters Association
of Sri Lanka which had pledged its fullest co-operation to implement
it, he added.
now the Central Bank has been compiling balance of payment statistics
based on Customs data on exports after reconciling them with the
inflow of funds through commercial banks on such exports.
exchange controls were liberalized in 1994 exporters were allowed
to retain their export proceeds either in a dollar or rupee bank
account in Sri Lanka or a bank account abroad. Previously, they
were required to repatriate export proceeds within 180 days.
Central Bank estimates that exporters have not been repatriating
around 10-12 percent of export proceeds annually over the last 10
years. Board of Investment chairman Saliya Wickramasuriya recently
said this amounts to around $6 billion, or three times the current
exporters used to negotiate their export proceeds directly with
their buyers without going through banks for purposes of cost-effectiveness
and urgency of supplies to avoid delays such as those caused by
said they decided to start collecting information on export proceeds
directly from individual exporters because of difficulties in ascertaining
export proceeds received through banking channels owing to identification
the scheme exporters must report their export proceeds with effect
from January 3, 2005 on their exports for the third quarter of 2004.
The time lag is because it takes at least 120 days to get export
proceeds after making shipments.
must inform the values of exports declared by them to customs, provide
information on the amount repatriated, amount retained abroad for
their payment of overseas expenses and amount so far used for such
expenses out of foreign retentions and details of short shipments
and defaults by foreign buyers.