Sri Lanka to Lift Some Limits on Rupee Conversion for Outward Remittances
Colombo, Sri Lanka has approved a gradual lifting of some limits on converting rupees to foreign exchange for outward remittances, according to cabinet spokesperson Bandula Gunawardane. The new directions will be presented to parliament for approval, marking a significant development for the country’s economy.
The central bank had previously suspended permission to remit funds for overseas investments by Sri Lankan residents from mid-2020, except under certain conditions. This move had a significant impact on the country’s financial landscape.
Gunawardane informed reporters during the weekly cabinet briefing that Sri Lanka’s reserves have gradually improved, leading to the decision to increase limits under the guidance of the central bank. This decision is expected to have a positive impact on the country’s economic recovery.
Sri Lanka, with a population of 22 million people, has been slowly recovering from its worst financial crisis in decades. The crisis led to soaring inflation, currency depreciation, and low foreign reserves, causing significant hardship for the nation’s residents.
According to the central bank, Sri Lanka’s official reserves stood at $4.4 billion at the end of 2023, marking a 22% increase. The reserves include a significant portion in Chinese yuan-denominated swap, highlighting the country’s efforts to diversify its foreign exchange holdings.
