Sri Lanka next forex liberalization wave after budget

June 15, 2010 (LBO) – Sri Lanka will see the next wave of foreign exchange liberalization after the budget, which is due at the end of June, Central Bank Governor Nivard Cabraal said. “Regulations are being drafted,” Cabraal said. “As soon as the regulation are drafted and tested we will announce them. The next set will be after the budget.”

Cabraal announced sweeping foreign exchange relaxations in January 2010 as part of his annual road map statement on monetary policy direction.

The road map statement said the central bank intended Sri Lankan citizens to open bank accounts abroad, and allow investments funds to invest a part of their money abroad.

Some of the forex relaxations have already been implemented in phases.

“Before the end of the year all the announced measures will be implemented,” Cabraal said.

In the policy statement, the monetary authority said in 2010 it planned to increase money supply only with the acquisition of foreign assets.

“The main source of reserve money growth in 2010 is expected to be the expansion in net foreign assets (NFA), as net domestic assets (NDA) of the Central Bank is expected to contract further in 2010,” the ro