Regulatory Alerts2020-06-19 | Banking Act Direction No. 5 of 2020Investments in Sri Lanka International Sovereign Bonds by Licensed Commercial Banks and National Savings Bank
The Central Bank of Sri Lanka directs licensed commercial banks and the National Savings Bank to suspend purchasing Sri Lanka International Sovereign Bonds for three months. Implemented with immediate effect, this directive aims to alleviate exchange rate and financial market stress triggered by the Covid-19 pandemic. The suspension does not apply to bond purchases funded by new foreign currency inflows into the banks.
CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT 19 June 2020 BANKING ACT DIRECTIONS No. 05 of 2020 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 the pressure on the exchange rate and the stress on financial markets due to the impact of Covid-19 outbreak, requires licensed commercial banks and National Savings Bank to suspend the purchase of Sri Lanka International Sovereign Bonds (ISBs) for a period of three months unless such purchase of ISBs is funded by using new foreign currency inflows to the banks. These Directions shall be implemented with immediate effect.