Sri Lanka to take action against violators of forex laws

COLOMBO, Aug. 1 (Xinhua) -- Sri Lanka's central bank (CBSL) has warned that companies and individuals that do not comply with all regulations on foreign exchange transactions will be punished sternly, local media reported on Monday.

The CBSL said that a major factor contributing to the current crisis in the country is the lack of foreign exchange liquidity in the banking system.

To ensure adequate foreign exchange liquidity in the banking system, the central bank had to impose surrender requirements on export earnings.

The success of these regulatory measures and the ability to achieve the intended outcomes depend on the support and cooperation from the trading community and the banking system, the bank said.

"However, it has been brought to the notice of the CBSL that certain market players are not being fully compliant with these regulations," the CBSL said.

"Such practice, if continued, would deprive the people of the support expected from the government in difficult times, while undermining the moral obligation of 'equal burden sharing' that is expected of all stakeholders under difficult and extraordinary circumstances."

Given these developments and in the best interests of the nation, the CBSL warned all stakeholders of the economy that all efforts would be made to strictly monitor and ensure compliance with all regulations on foreign exchange transactions.

"Any instances of non-compliance will be dealt with stern action within the provisions of all applicable laws," the CBSL said.

Sri Lanka has been going through a severe economic crisis and the lack of foreign reserves is preventing imports of essential items.