Sri Lanka’s Central Bank warns against foreign exchange transactions

Sri Lanka’s Central Bank has warned against transactions conducted in foreign currency between residents, which is a violation of current rules and liable to a punishment.

“The Central Bank has noticed certain instances where residents in Sri Lanka transact within the country in foreign currency, rather than in Sri Lanka Rupees. In this connection, the Central Bank wishes to clarify that according to the provisions of the Central Bank of Sri Lanka Act all transactions executed between or among residents in Sri Lanka shall be made in Sri Lankan Rupees, unless otherwise authorised,” it said in a statement on Thursday.

It said the Central Bank has not granted any authorisation for local merchants to receive any payments from its local customers to the credit of any Foreign Currency Account by converting Sri Lanka Rupees into foreign currency, including payments via Electronic Fund Transfer Cards (i.e. Credit or Debit cards). 

Accordingly, any person resident in Sri Lanka making payments to a merchant in Sri Lanka in foreign currency, and/or any merchant accepting payments in foreign currency from a person resident in Sri Lanka commits an offence and liable to a fine not exceeding Rs. 25 million or imprisonment of either description for a term not exceeding three years; or  both such fine and imprisonment