Sri Lanka Foreign Exchange Act to be amended soon

The Foreign Exchange Act, No. 12 of 2017 (FEA) will be amended in the early part this year providing the necessary framework to regulate the functioning of the formal foreign exchange market more efficiently, Central Bank Governor Nandalal Weerasinghe told journalists on Wednesday.

It will be empowering the regulatory authorities to take prompt actions against violations of and/or non-compliance with foreign exchange transactions, he pointed out.

Further, required amendments to the FEA are expected to be finalised and brought in place during early 2024.

In terms of foreign exchange management, the Central Bank will continue to introduce and implement proactive and timely policy measures by way of Regulations, Orders, and Directions under the provisions of the Foreign Exchange Act.

These policy measures are expected to further promote foreign exchange inflows to the country, while addressing stakeholder concerns, regulating the domestic foreign exchange market, and strengthening the surveillance of foreign exchange inflows and outflows, he added.

Moreover, to improve compliance with prevailing foreign exchange regulations, active identification of areas, in which key stakeholders (authorised dealers, restricted dealers, and the public) lack awareness, is to be continuously identified and addressed appropriately through digital platforms.

With the observed improvements in the liquidity position of the domestic foreign exchange market, the Central Bank would review the existing restrictions on certain capital foreign exchange outflows on a priority basis with a view to gradually unwinding these restrictions.

The Export Proceeds Monitoring System (EPMS) implemented during 2022 would be further optimised, ensuring improved efficiency and effectiveness of the monitoring mechanism of export proceeds repatriation, he divulged. (Bandula)