Sunday Dec 22, 2024
Sunday Dec 22, 2024
Friday, 20 December 2024 00:25 - - {{hitsCtrl.values.hits}}
The Cabinet of Ministers at their meeting on Wednesday approved new directives under the Foreign Exchange Act No. 12 of 2017 to extend and amend certain restrictions and suspensions on capital transactions.
The new measures, effective from 20 December 2024 will remain in place for six months till June 2025, aiming to safeguard the country’s foreign exchange reserves.
“Since April 2020, a series of directives have been issued under Section 22 of the Foreign Exchange Act on the recommendations of the Central Bank (CBSL). These measures were implemented to manage capital flows and mitigate pressures on foreign reserves during challenging economic times,” Cabinet Spokesman and Minister Dr. Nalinda Jayatissa said at the weekly post-Cabinet meeting media briefing yesterday.
In line with improving market conditions, he said 10 directives were issued between July 2023 and December 2024 to gradually relax some of the restrictions. However, the validity of the current directives was set to expire on 19 December 2024.
Thus, the CBSL proposed the issuance of updated measures to align with advancements and future prospects in the foreign exchange market. These measures include further amendments to existing suspensions and restrictions to ensure balanced progress in capital flow management while protecting reserve stability.
He said the extended measures provide a clear policy framework for businesses and investors, signalling Government’s cautious approach toward reopening capital transactions.
The proposal to this effect presented by President Anura Kumara Dissanayake in his capacity as the Finance, Planning and Economic Development Minister was approved by the Cabinet of Ministers.
