RegAlert
2021-01-25 | Banking Act Direction No. 2 of 2021

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Forward Sales and Purchases of Foreign Exchange by Licensed Commercial Banks

The Monetary Board of the Central Bank of Sri Lanka has directed licensed commercial banks to suspend forward foreign exchange contracts for three months effective immediately. Issued under Section 46(1) of the Banking Act No. 30 of 1988, this directive aims to curb excess market volatility and mitigate risk management pressures on financial institutions. All licensed commercial banks must refrain from entering into new forward contracts during the specified period to ensure broader market stability.

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MONETARY BOARD
CENTRAL BANK OF SRI LANKA

25 January 2021 | BANKING ACT DIRECTIONS | No. 02 of 2021

FORWARD SALES AND PURCHASES OF FOREIGN EXCHANGE BY LICENSED COMMERCIAL BANKS

Issued in terms of the powers conferred by Section 46(1) of the Banking Act No. 30 of 1988, as amended.

In view of the need to avoid excess volatility in the foreign exchange market and the impact on banks’ risk management, licensed commercial banks are hereby informed to refrain from entering into forward contracts of foreign exchange for a period of three months with immediate effect.

(Signature)

Prof. W D Lakshman
Chairman of the Monetary Board and
Governor of the Central Bank of Sri Lanka

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Lineage: In force

Banking Act, No. 30 of 19881988Banking Act, No. 30 of 1988 (1988-09-16)Forward Sales and Purchases ofForeign Exchange by Licensed …2021-01-25 · this documentForward Sales and Purchases of Foreign Exchange by Licensed Commercial Banks (2021-01-25)
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