Central Bank asks Sri Lanka’s money changers to up collections, but new tax pushes dollars underground

Sri Lanka’s central bank is asking the country’s licensed money changers to raise more dollars to be allowed to continue in business. They are expected to buy foreign exchange from tourists and those who return from working abroad and deposit it in commercial banks.

According to their license, money changers cannot sell foreign exchange back to customers.

Central Bank says money changers have to supply more dollars to the system in order to justify their being allowed to continue in business.

If in 1999 we had 14 million dollars coming into the banking sector through money changes and if in the year 2006 it is only 100 million dollars, you would be the first to say it is not worth having such a system, Central Bank Governor Nivard Cabraal told Sri Lanka’s 60-odd money changers this week.

So you have to ensure that your own function and your own trade is made an indispensable trade. For that, you have to ensure that more and more money comes into the system.

After climbing steadily to 180 million dollars in 2004, dollar deposits from