Central Bank acts tough against money changers found selling dollars at high rates

The Central Bank (CB), which promised last week to crack the whip against remittances using informal channels, on Thursday threatened action against money changers who sell foreign currency at rates higher than licensed banks.

Although the banks are expected to follow the CB’s prescribed US dollar rate of Rs. 203 per dollar, money changers have been selling the US currency at Rs.230-240 over several months now.

“The general public is informed that Authorized Money Changers have no authority to transact foreign exchange at rates higher than those offered by the banks to such Money Changers,” the CB said, listing four money changers – including two popular shops in Wellawatte - that have violated CB rules.

The statement said that in response to several complaints that certain Authorized Money Changers are engaged in activities which are not in compliance with the Directions issued under the provisions of the Foreign Exchange Act No. 12 of 2017 (FEA), the CB is conducting a series of spot examinations at the places of Authorized Money Changers, thereby strengthening the monitoring and supervision of the Authorized Money Changers.

In the spot examinations conducted during the months of November and December 2021, it was revealed that four Authorized Money Changers have not complied with the Directions issued to them under the provisions of FEA.

Accordingly, after the Minister of Finance was informed, notices have been issued to them to comply with the relevant Directions, within a specified time period. They are New Natasha (Pvt) Ltd at No. 12, Super Market Complex, Wennappuwa; George Michael Holdings (Pvt) Ltd at No. 157, Chilaw Road, Wennappuwa; Royal Money Exchange (Pvt) Ltd at No. 55, Galle Road, Colombo 06 and Prasanna Money Exchange (Pvt) Ltd at No. 57, Galle Road, Colombo 06

The CB said that in the event the errant Authorized Money Changers fail to rectify the issues communicated through the Notices, the CB will be compelled to suspend and to revoke the permits issued to such Authorized Money Changers.