Sri Lankan authorities are tightening scrutiny on export inflows as the country battles an exchange crisis brought about by falling capital flows and rising imports. Sri Lankan authorities are tightening scrutiny on export inflows as the country battles an exchange crisis brought about by falling capital flows and rising imports. The Department of Exchange Control, an arm of the Central Bank said on Tuesday, all exporters to will have to file details of their export proceeds with the bank from January 3, 2005.
The Controller of Exchange said the export proceeds monitoring mechanism will improve the country’s foreign exchange management systems.
While most countries in Asia, including India saw their domestic currency appreciate against a weakening greenback, the Sri Lanka rupee has depreciated 9 per cent against the dollar during 2004.
Artificially low, negative real interest rates, and subsidies on imported commodities including fuel, fertilizer and wheat has led to a consumption boom, worsening exchange woes.
The island nation’s trade deficit, ballooned to US$ 564 mn to US$ 1,704 million, for the ten months ended October.
Officials have t