Cen Bank offers incentives to attract foreign currency into country

COLOMBO (News1st): The Central Bank on Thursday offered a raft of incentives including exemption from exchange control regulations and tax-free anytime exit to encourage Sri Lankans including expatriates to attract foreign currency into the country days after a 220 million dollar Development Bond issuance was under subscribed. Central bank governor Prof. W.D. Lakshman in a letter addressed to all Sri Lankans and well-wishers living in Sri Lanka and abroad requested to deposit savings and other funds in foreign currency during the next three months and said those deposits will be accepted without any hindrance, will be exempted from exchange control regulations and taxes, and will be protected under banking secrecy provisions. The appeal came after the central banks 220 million dollar auction of Sri Lanka development bond undersubscribed on Monday with only 22 million dollars of bids coming from investors. The government was only able to raise 11.93 million dollars from the auction. The government on Wednesday suspend all restrictions on foreign currency inflows into the country for the next three months. In the letter, central bank governor Lakshman said the foreign currency deposits in the banking system will help authorities to overcome the COVID-19 pandemic in the country. "We also guarantee the future convertibility of these deposits into foreign currency whenever you desire to do so," the letter said adding that such deposits will be accepted without any hindrance. The central bank chief added that all forex remittances will be exempted from exchange control regulations and taxes, and will be protected under banking secrecy provisions. He pointed out that the country welcomes deposits in foreign currencies from donors, charity organisations, and well-wishers in addition to expatriate workers.