In a bid to give a fillip to foreign investment, the Central Bank (CB) is mulling more exchange control eases by next year, on top of the nine relaxations they introduced in line with the budget proposals, CB sources said.
“We’re trying to further relax controls in capital account transactions which will facilitate more foreign participation in the capital market,” a CB source told the Business Times on the back of the media briefing to announce the exchange control relaxation policy package of CB last week.
He said the CB has identified more sectors such as education and freight forwarding, etc where foreigners are only permitted to invest in limited amounts. “For instance, in the education sector (schools, universities, etc) foreigners can only invest up to 40%. What we are discussing is to do away with this limit, enabling them to invest 100% in education,” he said, adding that this move will facilitate more foreign universities into the country.
He said the CB is also gearing to relax foreign transactions pertaining to travel agents. He also said that relaxation pertaining to foreign investment in unit trusts, (which are pools of income producing shares bundled into portfolios which are sold to investors) will come during early next year.
He said that the CB plans to increase more facilities in accounts designed for migrant workers which will help them with their foreign account transactions. The CB announced a relaxation of foreign exchange regulations relating to investment by Sri Lankans abroad, foreign borrowings by resident companies and investments by non-residents in the domestic market. While new foreign currency accounts have been introduced for a number of vital sectors including tourism and gem and jewellery industry, the CB said that the implementation of these policies is expected in two stages; the first set of policies with effect from Monday and the other policies with effect from 01st January 2011. |
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