Central Bank relaxes mandatory export conversion period

The Central Bank has relaxed the mandatory export conversion period in the latest exports proceeds conversion rule which came into effect from 4 November.

As per the new rules, the mandatory export conversion period has been extended to roughly a three-month period from an earlier one-month period.

“By these rules, the period applicable for exporters of goods for mandatory conversion of residual of their export proceeds into Sri Lanka Rupees has been extended up to the tenth (10th) day of the month after expiration of three (03) calendar months (including the month of receipt) from the date of receipt of export proceeds/supplier receipts, as against the period of seventh (07th) day of the following month, which had been stipulated in the previous rules,” the CB said in a media release. 

With this move, the CB claimed that it has substantially relaxed the period applicable for exporters of goods to convert their export proceeds into Sri Lanka Rupees.  However, the exporters, in particular apparel exporters have urged the CB to remove the mandatory conversion of export proceeds altogether.

The new mandatory export conversion rules termed “Repatriation of Export Proceeds into Sri Lanka Rules No. 01 of 2024” (Rules), was published in the Gazette Extraordinary No. 2391/02 on first of July this year. It was approved in parliament on 4th of September this year and came into effect on the same date. 

The CB tightened the mandatory export conversion rules as the country fell into forex and economic crises. The CB noted the stabilisation of macroeconomic indicators, in particular the developments in domestic foreign exchange market conditions as the key reason to ease these rules. 

Source: Daily Mirror