Capital controls It is reported that the government has announced yesterday (25) that due to the improvements seen in the country’s domestic foreign exchange market, it will relax certain restrictions on foreign remittances from April 2020.
Accordingly, the new order will be effective for six months from June 28, 2023, with the recommendation of the Finance Board of the Central Bank of Sri Lanka and the Cabinet of Ministers.
But early last month, the government decided to extend the capital controls by another six months to rebuild the country’s foreign exchange reserves to an adequate level, and by the end of June 2023, the country’s foreign exchange reserves stood at about $3.5 billion. Also, these limits were imposed during the height of the Covid-19 lockdown to reduce pressure on the exchange rate and protect the country’s foreign exchange reserves under Section 22 of the Foreign Exchange Act. Introduced for the first time, the new order issued under the Act has relaxed certain restrictions on outward remittances for capital transactions.
Accordingly, under the new order, the first-time claim for immigration allowance has been increased from US$30,000 under the previous order to a maximum of US$50,000 and the repatriation of migrants’ current income or accumulated current income is no longer subject to any limitation.
Earlier it was subject to a maximum of US$ 30,000.
