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Measures Introduced by CBSL to ease pressure on the exchange rate and prevent financial market panic due to the COVID-19 pandemic

on: March 19 ,2020 In: Developing News

The Central Bank of Sri Lanka (CBSL) has introduced several measures to ease the pressure on the exchange rate and prevent financial market panic due to the COVID-19 pandemic.

In a directive issued to licensed commercial banks and National Savings Bank, the banks have been asked to implement the following measures with immediate effect from the issue of the notice on 19th March 2020 for a period of three months: 

  1. Suspend facilitating importation of all types motor vehicles, other than those excluded specifically under Banking Act Directions No.01 of 2020, under Letters of Credit
  2. Suspend facilitating importation of non-essential goods specified in Banking Act Directions No.01 of 2020, under Letters of Credit, Documents Against Acceptance and Advance Payment
  3. Suspend the purchase of Sri Lanka International Sovereign Bonds by licensed banks in Sri Lanka

Additionally, CBSL has also informed Authorized Dealers of foreign exchange that they are allowed to issue foreign currency notes as travel allowance only up to a maximum of USD 5,000 (or its equivalent in other foreign currency).

Source: https://www.cbsl.gov.lk/en/news/the-central-bank-of-sri-lanka-introduces-urgent-measures-to-ease-the-pressure-on-the-exchange-rate-and-prevent-financial-market-panic-due-to-the-covid-19-pandemic