Central Bank lifts forced dollar conversion rule on services export receipts

• Says conversion rule does not apply to service export proceeds on or after Aug. 12
• Says the decision taken to encourage service exporters to repatriate their export proceeds
• However, mandatory requirement to receive services exports proceeds within 180 days remains unchanged 
• Sri Lanka has received little over Rs.1.5bn as services exports in first half; US$ 406mn converted to rupees

The Central Bank yesterday said it has lifted the mandatory requirement to convert services export proceeds that

are received in Sri Lanka on or after August 12, 2022.

The monetary authority said the decision was taken to encourage service exporters to repatriate their export proceeds into the country.

“The service exporters may use their export proceeds repatriated to Sri Lanka for the permitted purposes,” the Central Bank said.
However, the mandatory requirement to receive proceeds of service exports to the country within 180 days from the date of provision of services remains unchanged. 

Amid the foreign exchange shortage, the Central Bank last year imposed a series of controls forcing exporters of goods and services to convert dollars by force, and also imposed outward exchange controls.
Soon after becoming the Central Bank Governor in April, Dr.Nandalal Weerasinghe said he would remove the forced conversion rule on services export receipts as part of a plan to relax controls imposed on foreign exchange repatriation. 

Meanwhile, the Central Bank citing information submitted by banks said, during the first six months of the year, a total US$ 1, 533 million has been received as service export receipts, of which US$ 406 million has been converted to Sri Lankan rupees.

The highest monthly service export proceeds of US$ 324 million were received in March 2022. 
The Central Bank also said during its discussions with representatives of service exporters, they have highlighted the potential to further enhance export receipts.

“All exporters are encouraged to bring in all export proceeds to the country at this time of need, while taking note of the mandatory requirement to receive such proceeds within 180 days,” the Central Bank said.
It also said it has intensified its monitoring on compliance with relevant requirements with respect to exporters and authorised dealers.