Strict adherence to curbing foreign currency outflows
Sri Lanka is strictly adhering to curbing foreign currency outflows while encouraging foreign investment for local projects as joint ventures to drive economic growth introducing new laws to fully protect investments and inward foreign remittances, Finance Ministry sources said.
The government has taken this decision amidst net capital outflows of around US$540 million (0.7 per cent of GDP) as of mid— November since mid February this year, mostly from the Treasury securities market, official data showed.
Foreign currency outflows in relation to any investments by local persons, outward remittances and repatriation of funds by emigrants have been suspended along with suspension of Letters of Credit (LCs) facilities on the importation of selected motor vehicles.
The importation of selected non-essential goods under LCs, documents against acceptance and advance payments has also been suspended.
Sri Lanka will not be able to meet its $2 dollar foreign direct investment (FDI) target this year owing to the economic impact of COVID-19, government officials said.
The government will promote foreign investment as Built Operate and Owned (BOO), Built Operate and Transfer (BOT), Built Operate Owned and Transfer or Public Private Partnership (PPP) projects only at the moment, they said.
Restrictions have been imposed on all non-essential imports with certain conditions while issuing directions to authorized dealers to issue foreign currency notes up to a maximum of $5,000 (or its equivalent in other foreign currency) instead of a current $10,000 as travel allowance to persons resident in Sri Lanka travelling abroad for any purpose.