Validity period to open SDAs extended

The Central Bank yesterday extended the validity period to open Special Deposit Accounts (SDAs) introduced this April to bring in foreign currency into the country at higher interest rates than what is offered under normal circumstances to lure more of such funds to strengthen the country’s external reserve buffer. 

To this effect, the Department of Foreign Exchange of the Central Bank said the government decided to extend the validity period of opening such SDAs up to April 7, 2021 on Monetary Board recommendation. 

Since the introduction of the new account to collect foreign currency denominated funds in April, it has accumulated US$ 272 million. Ability to achieve a total of US$ 500 million during the next four months would prove to be a major relief from the country’s 
external standpoint. 

The government introduced SDAs for Sri Lankans and non-Sri Lankans, both residents in or outside of Sri Lanka, consisting of both individuals and corporates, to send in their foreign currency to a fixed deposit account earning an additional 1 percent for 6 months and 2 percent for funds kept for 12 months. 

Meanwhile, in order to retain the foreign currency collected in the accounts, which have now reached maturity, the government has decided to renew and continue funds in these accounts as normal deposits with 
authorised dealers. 

“The funds held in SDAs so continued as normal deposits will be eligible only for the interest rates offered by the authorised dealers for normal term deposits of the respective banks,” a Central Bank statement said. 

Upon maturity, the funds in the SDAs are allowed to be freely converted and repatriated outside Sri Lanka on any future date while such funds could also be transferred into an inward investment account or a personal foreign currency account, if the account holder is eligible to open or currently maintains such an account. 

“The Central Bank of Sri Lanka has issued necessary directions to authorised dealers (Licensed Commercial Banks and National Savings Bank) to implement the above decisions of GOSL,” the statement added.