Special Deposit Account receives over US$ 200mn in less than six months

The Special Deposit Account (SDA) introduced by the government at the height of the pandemic to collect foreign currency from Sri Lankans living here or abroad had surpassed the US$ 200 million mark by end-September.

By mid July—three months into its introduction— SDA had a US$ 87 million balance accumulated in to the account. 

While no amount would please the Central Bank or the Treasury given the pandemic-induced external sector pressure on the country’s economy, surpassing US$ 200 million in slightly less than six months could be considered a significant achievement. 

The Central Bank in April introduced the SDA to invite Sri Lankan and non-Sri Lankan well wishers in or outside Sri Lanka, to send in their foreign currency to alleviate the pressure on the country’s foreign exchange earnings beset by the pandemic.The account, which is in the form of a fixed deposit, offers 1 percent above the normal rate for 6-months deposits while 12-month deposits get 2 percent above the normal rate and act as a incentive for those who has foreign currency liquidity to fetch a higher rate at a time when the dollar rates hover at rock bottom levels. 

The funds in these deposits are freely convertible and remitted outside Sri Lanka upon maturity. 

Last week, in the wake of Moody’s ill-timed downgrade of the Sri Lankan sovereign, Opposition legislator Dr. Harsha de Silva said they were, “yet to see any foreign currency pour into the Special Deposit Accounts (SDAs) which the government introduced in April.” 

“What happened to them? Where is the money? Investors always do their homework, and the reason there are no transfers is because they have no confidence in this government” he told a press conference on the eve of Moody’s downgrade.