Central Bank tweaks export proceed conversion rule

• Allows 14-day period for exporters and banks to convert repatriated export proceeds to rupees 

In a fresh gazette on Wednesday, the Central Bank (CB) has granted a 14-day period to exporters and the banking sector to convert 25 percent of repatriated export proceeds, after considering the practical issues faced by the banking sector in converting export proceeds into rupees immediately, as stipulated in the previous gazette. 

The exporters earlier complained that they faced delays in recovering their repatriated export proceeds through respective banks, due to a  confusion in the banking sector. 

However, the CB maintained the rule requiring the exporters to convert 25 percent of their export proceeds through licensed commercial banks into rupees and the requirement to repatriate all export earnings to the country within 180 days after the shipment. 

“Every exporter of goods shall, within fourteen (14) days upon the receipt of such export proceeds into Sri Lanka as required under Rule 3 above, convert twenty-five per centum (25 percent) from and out of the total of the said exports proceeds received in Sri Lanka into Sri Lanka rupees, through a licensed bank.

Provided, however, that such date of conversion, shall not be a date later than the date before which the export proceeds shall be received in Sri Lanka as required by Rule 3 (i) above (i.e., not later than one hundred and eighty (180) days from the date of shipment),” the new gazette notification stated.

However, the CB officials said that these are ‘short-term’ measures to address the country’s balance of payment issues.

The CB expects to purchase 12.5 percent of merchandise export forex earnings to build up the country’s current foreign reserves.