The Central Bank of Sri Lanka says due to the reduction in foreign exchange inflows in recent weeks, a number of issues have arisen.
Issuing a statement, the Central Bank said as per the latest Customs data, although export earnings have averaged US$ 985 million during the eight months ending August 2021, the monthly average repatriation of export proceeds during July/August has been US$ 640 million.
Accordingly, the CBSL said there has been a significant gap of US$ 345 million in the past month.
The Central Bank said the data therefore raises the serious question as to whether exporters comply with the regulation on 100 per cent repatriation of export proceeds.
The CBSL added that it also appears that due to an undue speculation on exchange rate movements, there has been a reluctance on the part of traders to convert export earnings during the period from January 2020 to July 2021, thereby limiting inflows to the domestic foreign exchange market.
The Central Bank accordingly has highlighted the importance of taking steps to ensure the complete repatriation of export proceeds within a reasonable period and the conversion of inflows of export proceeds into the local currency.