Central Bank issues new rules on export earnings conversion

Colombo, June 10 (Daily Mirror) - The Central Bank of Sri Lanka (CBSL) has issued an updated regulatory framework governing the repatriation and mandatory conversion of export proceeds, according to an Extraordinary Gazette notification.

The new directive, issued under the Central Bank of Sri Lanka Act No. 16 of 2023, is titled the “Repatriation of Export Proceeds into Sri Lanka Rules No. 2 of 2026”. 

The regulations further amend earlier frameworks introduced in 2024 and early 2026, tightening administrative controls on the handling of foreign currency earnings within the banking system.

Under the revised Rule 4, direct exporters receiving foreign currency earnings in Sri Lanka are required to convert any residual balances into Sri Lanka Rupees (LKR) on or before the tenth day of the following calendar month. However, exporters are permitted to first utilise their earnings for specified authorised payments.

These include current export-related transactions and one-month operational commitments, repayment of approved foreign currency loans (including one-month obligations), dividend payments to non-resident investors, and salaries for expatriate employees, subject to compliance with the Foreign Exchange Act.

Exporters may also withdraw foreign currency for business travel linked to export activities and invest up to 10% of export proceeds in foreign currency-denominated government securities issued by Sri Lanka. Payments to indirect exporters of goods and services are also permitted under authorised conditions.

The revised framework also extends to indirect exporters under Rule 6. Any secondary recipient of export-related foreign currency must follow the same utilisation rules and convert any remaining balances into LKR within the same stipulated timeframe.