SL Central Bank Urges Expatriates To Shore Up Forex Reserves

Colombo, May 18: Sri Lankan Central Bank (CB) has appealed the Sri Lankan expatriates to shore up the country’s dwindling forex reserves.

This came on the backdrop of newly appointed CB Governor Nandalal Weerasing saying he has told all political parties including the President that if political stability were not achieved in the next couple of weeks, he would tender his resignation as it will be impossible to negotiate with international donor agencies to resuscitate the crisis hit economy.

“The times are tough. We have about one million Sri Lankans working abroad. If they can send at least $500 to Sri Lanka, we can manage with the imports of essential items for the time being till we try to get the International Monetary Fund (IMF) bailout,” a senior CB official noted.

Increasingly, the expatriates are using informal channels to remit money into the country as there is a large disparity between the official exchange rate and the grey market rate. Now, the regulator guides the banks daily to decide the interbank exchange rate to attract more transactions by exporters and importers through official channels.

Currently due to the disparity in the official rate and the grey market rate the trade financing and other forms of transactions are done outside the financial system. This will help to minimise the volatility in the exchange rate and forex market and allow for a realistic rate for all players. Weerasinghe warned that the usable foreign reserves were barely enough to finance one week of imports.