Regulatory Alerts2021-04-23 | Banking Act Direction No. 6 of 2021Investments in Sri Lanka International Sovereign Bonds by Licensed Commercial Banks and National Savings Bank
The Central Bank of Sri Lanka has directed licensed commercial banks and the National Savings Bank to suspend purchases of Sri Lanka International Sovereign Bonds until further notice. Issued under the Banking Act No. 30 of 1988, this directive aims to alleviate exchange rate pressure and mitigate risks from substantial foreign currency outflows. The suspension effectively freezes new bond acquisitions by these financial institutions, prioritizing domestic liquidity and risk management stability.
MONETARY BOARD CENTRAL BANK OF SRI LANKA
23 April 2021 | BANKING ACT DIRECTIONS | No. 06 of 2021
INVESTMENTS IN SRI LANKA INTERNATIONAL SOVEREIGN BONDS BY LICENSED COMMERCIAL BANKS AND NATIONAL SAVINGS BANK
Issued in terms of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act No. 30 of 1988, as amended.
The Central Bank of Sri Lanka with a view to easing pressure on the exchange rate and considering the substantial amount of possible/potential outflow of foreign exchange by banks and its impact on banks’ risk management, requires the licensed commercial banks and National Savings Bank to suspend the purchase of Sri Lanka International Sovereign Bonds until further notice.
(Signature)
Prof. W D Lakshman Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka
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