Parliament approves Foreign Exchange Bill

Wednesday, 26 July 2017 00:00 - - {{hitsCtrl.values.hits}}

Lawmakers yesterday passed the Foreign Exchange Bill 2017 with amendments.

The division was taken where 94 were in favour of it and 18 were against it. The bill will provide for the promotion and regulation of foreign exchange to vest the responsibility for promoting and regulating foreign exchange in the Central Bank as the agent of the Government, to provide for the repeal of the Exchange Control Act (Chapter 423) and to provide for matters connected therewith or incidental thereto. Moving the second reading motion, Prime Minister Ranil Wickremesinghe said: “After World War II many countries brought in exchange control laws. The United Kingdom had this law well before the war. Based on the strong reserve, Sri Lanka did not see the necessity to have an exchange control act at that time. Rubber and other exports helped us to have a strong reserve and during the war we were able to give a loan to the UK.

“The Gal Oya development program was fully financed by our own reserves. But in 1953 the exchange crisis came up with our export earnings coming down. But the Central Bank and the Finance Minister brought in exchange control after 1956. Many countries started after we already liberalised their laws. Only 47 countries have not moved away from the restrictive system. We are in a peculiar situation. On one hand, we talk of controlling foreign exchange but with liberalisation introduced by different governments, laws were liberalised regardless of what the regulations said. If we don’t control the exchange why do we want to keep a law which is not objective? This reduces confidence in Sri Lanka. Not only exchange, but we don’t control gold as well. The Central Bank no longer controls gold imports, but the Customs Department. The new law will promote and regulate foreign exchange,” he added. (AH)