AFP :
The central bank of Sri Lanka on Sunday further tightened controls on the outflow of foreign currency to combat a growing cash crunch triggered by the coronavirus pandemic. Foreign exchange reserves have almost halved since late 2019 to $4 billion after the rupee sank to a record low last year.
The economy has been badly hit by the spread of the virus and lockdowns in its worst downturn since independence from Britain in 1948.
The Central Bank of Sri Lanka said overseas investments by local firms would be suspended for six months.
The amount of capital that companies and citizens can take out of the island nation would also be restricted, it added.
Sri Lanka already banned imports of luxury goods and cars last year to combat the foreign currency outflows.
The government is planning to extend the import ban to mobile phones, computers and electronic consumer goods, local media reported recently. The central bank said in a statement that the restrictions were to “assist and maintain the financial system stability”.
International rating agencies have expressed concern over Sri Lanka’s ability to service its huge foreign debt.
But central bank governor WD Lakshman has said the country will meet its debt obligations, which amount to $3.6 billion in the next six months.
