Objectives of special deposit account may not be realized, former SEC chief says

COLOMBO (News1st): Sri Lanka's move to open a special account to attract foreign exchange may prove futile, a former securities exchange commission chief said, citing economic instability. “Though they claim there will be a large foreign currency inflow into the country, I highly doubt it,” former SEC Chairman Nalaka Godahewa said. Recently, the government announced that Sri Lankans or Sri Lankan expatriates could deposit funds in the special account for a period of six years or one year, offering additional interest rates. However, Godahewa stated that the six month deposit period is a long term mechanism to attract foreign direct investments into Sri Lanka, which has to settle more than 4.8 billion US dollars of foreign loans this year. “People will only start to invest after determining how stable a country's economic environment is,” Godahewa added. Sri Lanka's economic woes have worsened after the country's trade deficit widened in January this year, according to the central bank, while the Sri Lankan rupee hit record lows against the US dollar amidst the coronavirus pandemic.