Illegal money changers in crisis as more transactions move into mainstream

Monday, 28 May 2012 01:02 - - {{hitsCtrl.values.hits}}

By Deepal V Perera

The volatile exchange rate environment since this year has dealt a fresh crisis for illegal money changers, though the positive outcome is that more transactions taking place officially.

“The illegal money changers are now finding a crisis situation to match the daily changing rates, therefore forcing many to change their foreign currencies at the official rates, resulting in a staggering rise in value of foreign money changing coming into the mainstream,” official sources said. According to the latest findings of the Central Bank, annually, people exchange foreign money worth of US$ 600 million via licensed money exchange centres. However, a significant amount of foreign currencies are exchanged in unauthorised channels, due to the attractive exchange rates offered by such channels.

“In the recent past we have noticed that due to the unpredictability of the country’s exchange rate, the illegal money changers have been finding it difficult to give an attractive rate higher than that of the official rates,” Controller of Exchange P.H.O. Chandrawansa told the Daily FT.

He said that due to this reason, many were forced to switch into the legal rates, with the Central Bank was now experiencing more and more transactions taking place officially.

According to the Central Bank, there are about 80 authorised money changers in the country including banks and there is a necessity of setting up more and more centres in the country. Out of the total number of money changers, 62 licenses have been granted to private companies incorporated in Sri Lanka.

“In order to ensure the orderly function of authorised money changers, we are now going to make it compulsory that each every money changing centre has a CCTV connected with the Central Bank to monitor the changing centres online. For that we will be making directives this month, ensuring that changing centres have a CCTV which can be connected to the Central Bank online,” the controller said.

The Central Bank also said that the people who come to change money are mainly tourists, migrant workers and Lankan Diaspora living abroad.