Foreign Exchange Act “could change the dynamics of Sri Lanka’s Economy”

Foreign Exchange Act “could change the dynamics of Sri Lanka’s Economy”

By Lahiru Fernando

31 Dec, 2017 | 9:26 pm

The new Foreign Exchanged Act “could change the dynamics of Sri Lanka’s Economy”, reported the Sunday Times newspaper today (December 31).

Quoting a senior Central Bank official, the newspaper article says the act has been introduced to further liberalise the capital inflows and simplify the processes associated with current account transactions and foreign currency and Rupee accounts.

According to the report, the foreign exchange management function in Sri Lanka was exercised by the Central Bank on behalf of the government.

The new act now recognises the following as being permitted to deal in foreign exchange:

  • Authorised dealers
  • Restricted dealers
  • Dealers for a specific purpose

The former chairman of the Ceylon Chamber of commerce Chandra Jayaratne told News 1st that most penalties stipulated in the act are subjected to the minister’s concurrence. However, civil activists question whether the people can place their trust in the ministers.

Why? As per the new act, a person who brings undeclared money worth (US) $1 million into the country will only have to pay 1 percent as a fee. If the undeclared amount value is over (US) $1 million, that 1 percent too will be waived, according to the new act.

Speaking on the matter, President’s Counsel Hemantha Warnakulasuriya said:

“By legislation, for the first time, charges against the Minister were dropped. Now that is reprehensible. No right thinking person would ever agree to that and that was done fooling the eyes of the public. And how did this happen without anyone knowing?”