Business
New rules to convert will have multiple benefits for the country – CBSL
Sri Lanka has embarked on a focused path towards ensuring macro-economic and financial system stability, having faced strong headwinds from the COVID-19 pandemic. The pandemic resulted in a substantial loss of foreign exchange revenues to the country, but unprecedented support provided by the Government and the Central Bank of Sri Lanka (CBSL), from fiscal, monetary and public health aspects, has helped a strong rebound of the economy as well as a considerable recovery in some foreign exchange earning sectors. The tourism sector is also expected to display a notable recovery in the period ahead, and concerted efforts are taken to improve worker remittance inflows through formal channels. Recent tensions in the forex market have also highlighted the need for Sri Lanka to increase its reliance on foreign exchange earnings over time to strengthen the economy, rather than increasing its foreign borrowings which exposes the economy to various types of shocks.
In this context, in February 2021, the CBSL issued Rules under the provisions of the Monetary Law Act to reinforce the prevailing repatriation requirement on proceeds of merchandise exports and ensure the conversion of a given share of such proceeds within a specific period of time. These Rules that had been based on similar rules of neighbouring countries, had been fine-tuned from time to time upon requests made by the business community, while those have also helped to ease foreign exchange liquidity issues faced by the domestic market to some extent, with a gradual improvement in repatriation and conversion of export proceeds. In addition, with mandatory sales of export proceeds converted under the aforesaid Rules by licensed banks, the CBSL has been able to purchase a reasonable quantum of forex from the market thus far during the year, which the CBSL 2 has utilised to part-finance the import of essential commodities to the country during the past few weeks.
Under the new Rules issued on 28October 2021, the minimum mandatory conversion rate of 25 percent has been relaxed, and instead, exporters have provided with the opportunity to utilise export proceeds for:
a) outward remittances in respect of current transactions;
b) withdrawal in foreign currency notes, as permitted;
c) debt servicing expenses and repayment of foreign currency loans;
d) purchases of goods and obtaining services including one-month commitments; and
e) payments in respect of making investments in Sri Lanka Development Bonds (SLDBs) in foreign currency up to ten per cent of the export proceeds, so received.
The residual after the utilisation of export proceeds as above will have to be converted into Sri Lanka Rupees. This method, followed by several other countries, ensures that exports with a large import content are not penalised, while enabling exports with a higher domestic value addition to convert a greater percentage of proceeds, after meeting foreign currency financial obligations of such enterprises.
In addition, considering the importance of the growing services export sector and the concessions provided to such sectors over time to expand their activities by the Government, the Rules have been extended to services exports as well. This coverage has been defined in the Rules as payments received in foreign exchange by a person resident in Sri Lanka for services (including professional, vocational, occupational, or business services) provided to a person resident outside Sri Lanka. Accordingly, remittances by Sri Lankan expatriates, which are not considered as services exports, will not be subjected to these Rules.
The implementation of the new Rules, which treat merchandise exports and services exports equally, is expected to provide greater foreign currency liquidity to the domestic market, ensuring the availability of foreign exchange for essential payments at a reasonable exchange rate by Sri Lankans, including the purchase of imported goods, overseas 3 education, foreign travel and health expenses, etc. In addition, the Rules will enable the identification of the true “value addition” of each export sector of the economy, through the different ratios of conversion as reported by banks.
Exporters enjoy various tax concessions and other advantages provided by the Government in recognition of the net foreign exchange inflow to the country through their operations, and in consideration of the benefits accruing to the country when such proceeds are converted into Sri Lanka Rupees. Realisation of these anticipated outcomes will therefore enable the Government to continue the provision of concessions to such sectors. Full repatriation of foreign exchange earnings and improved conversion will also help ensure the stability of the exchange rate and support the stability of the macro-economy and the financial system.
Business
SIA warns of 1,000 SME collapses, urges fair policies to protect Sri Lanka’s rooftop solar sector
By Sanath Nanayakkare
The Solar Industries Association (SIA), representing over 1,000 companies and employing 40,000 workers in Sri Lanka’s rooftop solar sector, issued a stern warning recently regarding threats to the industry’s survival and the nation’s renewable energy ambitions. The association condemned recent regulatory instability and called for urgent policy reforms to avert economic and social crises.
The SIA categorically rejected the Ceylon Electricity Board’s (CEB) claim that rooftop solar installations caused the recent island-wide power outage, calling the accusation “baseless and misleading.”
“Public trust is eroded when accountability is misdirected,” the SIA stated. “We demand an independent, transparent investigation led by experts appointed by the Ministry or the Public Utilities Commission (PUCSL). The CEB’s unilateral statements disregard the sector’s contributions and jeopardize Sri Lanka’s renewable energy transition,” they said.
“While acknowledging the formation of a tariff determination committee, the SIA criticized its narrow focus on financial parameters, ignoring the sector’s socioeconomic value. Rooftop solar empowers businesses and households with energy independence, reduces grid strain, and supports climate goals. However, proposed volatile tariff structures risk destabilizing over 100,000 installations—primarily owned by middle-class families—and deter future investment,” they noted.
“A rigid, equation-based tariff system is unsustainable,” the association warned. “Sri Lanka needs a stable policy framework to attract long-term investments. For instance, retirees could invest EPF savings into solar projects, securing income while advancing national energy targets. Without urgent action, 1,000 SMEs and 40,000 jobs face collapse, with dire consequences for employment, energy security, and economic stability,” they pointed out.
SIA urged policymakers to establish an independent committee to investigate the power outage fairly, expand the tariff committee’s mandate to include socioeconomic and environmental benefits and implement predictable policies to safeguard SMEs, households, and investor confidence.
“Sri Lanka stands at a crossroads,” the SIA emphasized. “Protecting rooftop solar isn’t just about energy—it’s about livelihoods, economic resilience, and a sustainable future. We urge stakeholders to collaborate on solutions that prioritize both people and progress,: they emphasized.
Starting its promotional work for 2025, Sri Lanka Tourism Promotion Bureau (SLTPB) added another feather into its cap of endorsements, by being recognized as the most innovative Tourism Board promotion in Outbound Travel Mart (OTM) . In parallel to that, several other sub events were held. The OTM was held in Jio World Convention Centre, Mumbai—India, from 30th January to 01st February 2025.Before OTM, the Global Village – Global Exchange & Trade Exhibition was held at the Surat International Exhibition & Convention Centre , Sarsana, Surat (Gujarat – India , from 25th to 27th January 2025. This travel fair was organized by Southern Gujarat Chamber of Commerce and Industry (SGCCI).
Sri Lanka participated in both OTM and South Asia’s Travel & Tourism Exchange (SATTE), held from 19th – 21st Feb 2025, in New Delhi, India . This was an excellent opportunity for Sri Lanka to promote it’s potential as a unique travel destination, especially for the Indian counterparts, as SLTPB has identified India as the number one source market for Sri Lanka, tourism bringing the largest number of tourist arrivals to the destination.
SLT-MOBITEL has entered into a strategic partnership with Rush Lanka Group to provide exclusive SLT-MOBITEL Fibre connectivity solutions to their portfolio of luxury apartment developments in Colombo and the suburbs, enhancing the digital experience of all residents.
The agreement was signed between Imantha Wijekoon, Chief Business Officer of Consumer Business at SLT, and Zaid Ariff, Director of Construction at the Rush Group headquarters. Representatives from both companies also attended the ceremony.
Under the partnership, SLT-MOBITEL will serve as the exclusive digital service provider for five prestigious Rush Lanka developments including Street Rush Residencies and Rush Court 4 in Mt. Lavinia, Rush Tower 2, Rush Metropolis in Dehiwala, and Rush Court 5 in Colombo 14. The collaboration ensures residents will enjoy superior fibre connectivity speeds, enabling seamless digital experiences in modern smart homes. The partnership with the Rush Lanka Group aligns with SLT-MOBITEL’s commitment to offer ultra-fast, reliable connectivity solutions to residential developments. Delivering exclusive fibre connectivity to luxury apartments, SLT-MOBITEL ensures residents have access to world-class digital services that complement the living experience promised by Rush Lanka Group.
Powered by advanced fibre technology, SLT-MOBITEL network will provide the residences with seamless performance across digital activities. The SLT-MOBITEL Fibre backbone ensures lag-free experiences whether tenants are gaming online, attending virtual classes, working remotely, or streaming high-definition entertainment. SLT-MOBITEL Fibre will transform the lifestyles of all apartment users bringing greater convenience and superior quality of life.
Rush Lanka Group, established in 1992, is a property developer specializing in luxury and semi-luxury apartments.
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