ECONOMYNEXT – Sri Lanka will bring in a new law on export dollar conversion based on the rules set by the central bank on export proceeds, Finance minister Basil Rajapsaksa said presenting a budget for 2022.
“I propose to submit a Special Finance Bill to ensure the safety of local and foreign exporters, to ensure the safety of transactions of foreign current accounts and to simplify the conditions that are imposed by the Central Bank on exports with regard to foreign currency conversions and transfers,” Minister Rajapaksa said.
The central bank has imposed surrender rules and dollar conversion rules on good and services exporters who are resident in Sri Lanka.
The central bank said those who do not convert the proceeds will be charged a higher tax.
There was some concern among some dollar earners after news spread the authorities had sought information from banks about dollar account holders.
Sri Lanka is in the midst of a severe foreign exchange crisis due to money printing by the central bank.
Sri Lanka has had external trouble ever since a Latin America style central bank was set up in 1950 by a US money doctor.
Analysts have called for changes to the monetary law to prevent money printing by the Monetary Board so that the country can progress. (Colombo/Nov12/2021)