Sri Lanka has reduced the limit on individual foreign currency possession from USD15,000 to USD10,000 in a desperate attempt to shore up its rapidly depleting forex reserve (FX) required to fund the import of essentials such as food and fuel.
Sri Lanka is in the grip of a severe currency crisis, which compelled the island nation to declare a default on its international debt in April, making it the first Asia-Pacific country to do so in decades. Minister of Finance Ranil Wickremesinghe issued the order under the Foreign Exchange Act in order to attract foreign currency into the hands of the public into the formal banking system.
An official statement said that the amount of foreign currency retained in possession by a person in or resident in Sri Lanka will be reduced from USD15,000 to USD10,000, or its equivalent in other foreign currencies.
From June 16, 2022, an amnesty period of 14 working days has been granted to deposit excess foreign currency or sell to an authorised dealer.
The move came more than a month after Governor of the Central Bank of Sri Lanka Nandalal Weerasinghe stated that the apex bank was considering lowering the foreign currency holding limit from USD15,000 to USD10,000.
Sri Lanka is experiencing its worst economic crisis since its independence in 1948, resulting in a severe shortage of essential items such as food, medicine, cooking gas, and fuel across the country.