Sri Lanka to Ease Foreign Currency Remittance Rules Amid Economic Recovery

Sri Lanka has announced plans to gradually ease restrictions on converting rupees into foreign currency for outbound remittances, with the proposed changes set to be submitted to the parliament for approval, according to cabinet spokesperson Minister Bandula Gunawardane on Tuesday.

Since mid-2020, the country’s central bank had halted approvals for transferring funds abroad for investments by Sri Lankan residents, except in specific cases.

“With Sri Lanka’s reserves showing signs of improvement, the central bank will oversee an increase in these limits,” Gunawardane stated during the weekly cabinet media briefing.

The nation, home to 22 million, is on a path to recovery from its most severe economic downturn in recent history, characterized by rampant inflation, a weakening currency, and dwindling foreign reserves.

As of the close of 2023, Sri Lanka’s official foreign reserves have risen to $4.4 billion, marking a 22% growth, as reported by the central bank. This total includes a swap denominated in Chinese yuan, valued at approximately $1.5 billion.