CB ups mandatory forex conversion rate to 25%

The Central Bank has with immediate effect increased the mandatory sale of foreign exchange by banks to 25% from 10%.

The relevant operating instructions were issued to the banks yesterday.

Accordingly, all banks are hereby required to sell to the CBSL, on a weekly basis, in dollars, 25% of:

1. Inward workers’ remittances (received in various currencies) which are converted into rupees until further notice

2. The residual of export proceeds which is mandatory to convert into rupees, until further notice

3. Foreign currency held in hand by the general public which is converted into rupees, until 31 January 2022.

Analysts said while the change does not impact clients who convert from foreign currency to rupees, there will be less foreign exchange available by banks to sell to clients who require to buy foreign currency against rupees.

Further, the CBSL informed banks that the incentives offered under the ‘Additional Incentive Scheme on Inward Workers' Remittance’ and ‘Incentives for General Public for Depositing, Converting and Investing of Foreign Currency held in Hand’ are extended until 31 January 2022.