The Central Bank of Sri Lanka (CBSL) has amended regulations governing export proceeds, requiring exporters to convert any residual foreign currency earnings into Sri Lankan rupees by the 10th day of the month following receipt after meeting specified foreign currency obligations.
The requirement was introduced through the Repatriation of Export Proceeds into Sri Lanka Rules No. 2 of 2026, issued by CBSL Governor Dr. Nandalal Weerasinghe, amending the Repatriation of Export Proceeds into Sri Lanka Rules No. 1 of 2024.
In the spot foreign exchange market yesterday, the rupee closed at Rs. 337/337.75 to the US dollar, compared with Rs. 337/337.30 on Monday.
Under the revised rules, exporters receiving export proceeds in Sri Lanka during any calendar month may utilise those funds only for a specified list of authorised payments before converting the remaining balance into rupees.
Permitted uses include current transactions related to export business, servicing foreign currency loans and other approved borrowings, dividend payments to non-resident investors, salaries of expatriate employees, business travel-related foreign currency requirements, investments of up to 10% of export proceeds in Government foreign currency debt securities, and payments to indirect exporters with foreign currency commitments.
The amendment also applies to indirect exporters receiving foreign currency payments from direct exporters, who are similarly required to convert any remaining balances into rupees by the 10th day of the following month after meeting authorised payments.
The latest change comes against the backdrop of recent volatility in the foreign exchange market, where strong demand for dollars coincided with tighter market liquidity.
Market participants said importer demand for foreign exchange had increased as some businesses sought to secure dollars in advance of future payment obligations, while exporters delayed conversions amid expectations of a weaker rupee. The resulting imbalance between demand and supply contributed to pressure on the exchange rate.
The revised rules are expected to increase the flow of export proceeds into the domestic foreign exchange market and improve the availability of foreign currency liquidity within the banking system.
Sri Lanka tightened export proceeds conversion requirements during the economic crisis, reducing the conversion period to 30 days as authorities sought to support foreign exchange inflows. The period was subsequently relaxed to 90 days as external sector conditions improved.
Although the new rules do not explicitly reintroduce a 30-day conversion requirement, they require exporters to convert residual balances monthly after meeting authorised foreign currency obligations.
The amendment follows recent engagement between the Central Bank and market participants as authorities sought to address pressures in the foreign exchange market and maintain orderly market conditions.