Business
Significance of repatriation and conversion of export proceeds for external sector stability and overall financial system stability
Sri Lanka’s merchandise export sector has shown a notable improvement in 2021 compared to the pandemic-affected 2020. As per the latest Customs data, export earnings have averaged US dollars 985 million during the eight months ending August 2021 compared to a monthly average of US dollars 837 million in 2020, while the average earnings have amounted to US dollars 1,064 million during June-August 2021. This is an appreciable development as the merchandise export sector (comprising diverse products) is the largest foreign exchange earner in most countries, including Sri Lanka.
Sri Lanka has had a trade deficit each year since 1977, and the gap between merchandise imports and exports is typically financed by other inflows to the external current account (such as tourism and other services inflows as well as workers’ remittances), and financial inflows (such as investments and borrowing).
In this background, some recent developments in the foreign exchange market have raised several concerns, particularly as some of these typical avenues of foreign exchange inflows have been affected due to pandemic-related pressures, as explained below:
a) Compared to the monthly average exports as reported by Customs (goods flow) of US dollars 985 million during the eight months ending August 2021, the monthly average repatriation of export proceeds during July/August 2021 has been US dollars 640 million as reported by banks (financial flow). Accordingly, there has been a significant gap of US dollars 345 million between these two figures. This observation therefore, raises the serious question as to whether exporters comply with the regulation on 100 per cent repatriation of export proceeds.
b) It also appears that due to an undue speculation on exchange rate movements, there has been a reluctance to convert export earnings during the period from January 2020 to July 2021, thereby limiting inflows to the domestic foreign exchange market, which situation has then resulted in a buildup of foreign currency deposit balances with the banking sector by a significant US dollars 1.9 billion. In addition, with low rupee interest rates, some exporters have found it more lucrative to borrow and import to meet their input requirements, leading to further tension in the domestic market.
c) As per the data available, it would also be noted that if there had been a 100 per cent repatriation and 100 per cent conversion of export proceeds, the monthly export foreign exchange flow into the domestic market would have been US dollars 985 million, and with the average expenditure on imports of US dollars 1,670 million, that would have resulted in a monthly average gap of US dollars 685 million. This could have been easily financed using other foreign exchange inflows into the country.
d) Based on the above past statistics in general, and the experience during July/August 2021 in particular, the monthly average gap between the conversions of export proceeds with an incomplete repatriation and expenditure on imports has been quite alarming.
It would also be fair to state that there is a necessity for a country to ensure that the foreign exchange generated through export activities are duly repatriated into the country and converted into its currency. In fact, many emerging market economies have repatriation and conversion requirements imposed on merchandise and services exports. Country experiences vary, and over time, with the buildup of a country’s foreign exchange reserves through such non-debt inflows, countries have also gradually relaxed these requirements. Regional economies such as Bangladesh, India, Indonesia, Malaysia, Nepal, Pakistan, and Thailand have export proceeds repatriation requirements currently in place varying from 3 months to 2 years of the export. Bangladesh, India, Pakistan and Thailand have repatriation requirements on both goods and services export proceeds, while in Nepal, Malaysia and Indonesia, the repatriation requirement is only applicable on goods exports. Bangladesh, India, Pakistan and Thailand have rules on conversion to respective local currencies in different percentages based on nature and the amount of repatriated export proceeds and their utilisation. Such repatriation and conversion requirements ensure the fulfillment of the demand for foreign currency, including intermediate and investment goods imports directly required by the export sector, as well as essential fuel and medical requirements of the country, which are indirect inputs to all sectors including the export sector.
Therefore, it would be reasonable for the Government (which supports the export sector through lower taxes and numerous other incentives) and the Central Bank (which is expected to deliver price and economic stability as well as financial system stability) to take steps to ensure the complete repatriation of export proceeds within a reasonable period and the conversion of inflows of export proceeds into the local currency, including the proceeds already accumulated in exporters’ accounts, so that the true purpose of exports is realised.
As would be well appreciated, an export would realise its objective only when it finally culminates in the flow of foreign exchange that is generated by the export into the country’s financial system in its local currency. That objective would obviously not be fulfilled if the final conversion of export proceeds into local currency does not take place. Accordingly, steps must be taken to strengthen the systems to ensure monitoring and to implement measures that lead to this objective. It is only then that the gap between the foreign exchange liquidity provided through exports and the foreign exchange liquidity demand for imports would reduce to the level as published in the Central Bank’s own reports.
Business
HNB Assurance Elevates ‘Liya Harasara’ 2026 with Unmatched Benefits to Honor the Spirit of Womanhood
HNB Assurance PLC launched the 2026 edition of Liya Harasara, its flagship annual initiative dedicated to celebrating and empowering women in line with International Women’s Day. Recognized as one of the most anticipated campaigns of the year, Liya Harasara continues to evolve, delivering meaningful protection and exclusive privileges designed to support women in every stage of life.
This year’s edition introduces the most rewarding benefits in the history of the initiative. Women who sign up for eligible Regular Premium Life Insurance policies will receive a Free Life Cover of up to Rs. 2 Million for one year, along with a Free Critical Illness Benefit of up to Rs. 500,000, providing enhanced financial security and reassurance when it matters most. Additionally, female policyholders are also entitled to pregnancy related hospitalization cash benefit for Life Insurance Policies with in-force Hospitalization Benefit, for a maximum of three days per annum.
Commenting on the significance of this year’s campaign, Lasitha Wimalarathne, Executive Director / CEO of HNB Assurance, stated: “As we mark our 25th year as a trusted life insurer, we wanted Liya Harasara 2026 to reflect the strength of the journey that brought us here. For 25 years, women have been at the heart of our story, as leaders, advisors, customers and changemakers. This special edition is our way of honoring that partnership and reaffirming our commitment to protecting their aspirations for the future. When women progress, families prosper and communities thrive and we are proud to stand by them with meaningful protection and lasting assurance.”
Sharing his thoughts, Dinesh Yogaratnam, Chief Marketing and Customer Experience Officer of HNB Assurance, added, “Liya Harasara has grown into more than just an annual campaign, it is a tribute to the Spirit of Womanhood, to resilience, ambition and strength. The 2026 edition has been thoughtfully enhanced to deliver greater value and deeper impact, ensuring women receive protection that truly supports their ambitions and wellbeing. We remain committed to creating solutions that empower confidence and provide peace of mind, enabling women to focus on achieving their goals without compromise.”
Business
Seven decades of sartorial excellence: The legacy of Linton Master Tailors in Kandy
In the 1950s, Linton Wimalasena Udagagedara served as the tailoring instructor at the rehabilitation unit of the Bogambara Prison. Known affectionately by all as “Linton Master,” he laid the foundation for a legacy that would eventually redefine men’s fashion in the hill capital.
In 1958, Linton Master ventured into private business by renting a small shop in Trincomalee Street, Kandy, under the name “Linton Master Tailors.”
Supported by a handful of employees and the unwavering strength of his wife, Srima Alwala, the business began its humble journey. In those early days, Linton Master would travel from Kandy to Pettah, Colombo, walking miles to handpick high-quality fabrics at affordable prices. Though the initial years were a struggle, he never compromised on quality.
Due to his commitment to superior craftsmanship and impeccable finishing, “Linton Master’s Shop” in Trincomalee Street soon became a household name across the Kandy region. By the 1970s, the thriving business moved to Yatinuwara Veediya. As the enterprise grew, Linton Master eventually purchased the rented building and the adjacent premises. In the 1990s, the brand reached its zenith, becoming a hallmark of excellence.
Following the passing of Linton Master in 2009, the business transitioned into a new era. Today, it stands proud at the same familiar location in Yatinuwara Veediya, rebranded as “Linton & Sons Master Tailors.” His legacy is carried forward by his children; while one son manages a printing press and a daughter runs a bridal wear brand under the Linton name, his son Nidarshana Udagagedara has significantly expanded the core tailoring business.
Today, Kandy is home to three main institutions bearing the prestigious Linton brand. Linton & Sons Master Tailors, now employing around 20 skilled professionals, is a nationally recognized name. Known for their international standards, it is said that anyone who gets a full suit tailored at Linton & Sons invariably returns for their second.
The business that once started with fabric handpicked from Pettah now utilizes world-renowned international brands. Linton & Sons is currently the only tailor shop in Kandy that creates garments using prestigious fabrics such as Raymonds, Pacific Gold, Medici, and Macone.
Current Chairman Nidarshana Udagagedara notes that they serve a loyal customer base, with complete groom’s suit packages ranging from Rs. 30,000 to Rs. 90,000. With a highly experienced team, they now offer an exclusive one-day service, allowing customers to have bespoke designs created to their exact specifications in record time.
Spanning seven decades, the Linton lineage, which has brought fame to Kandy, has now successfully expanded from the second generation to the third, ensuring that the master’s stitch continues to define elegance for years to come.
By S.K. Samaranayake
Business
LANKATILES Captivates Architect 2026 with a Spectacular Celebration of Fine Living
At the prestigious Architect 2026 Exhibition, LANKATILES unveiled an immersive Concept Studio of contemporary design, where every surface spoke in allusive ways of exquisite craftsmanship and architectural vision.
Among a host of outstanding participants, the Concept Studio was recognized with two of the exhibition’s highest accolades: Overall Best Stall and Best Trade Stall Displaying Local Products. This is a resounding testament to five decades of trust, quality, and innovation.
The Concept Studio was thoughtfully zoned to evoke the ambiance of curated interiors and sophisticated entryways, unveiling the latest designs introduced to the market. Visitors were guided through a seamless spatial journey, beginning with the Living Zone, where expansive surfaces harmonized durability with refined design to elevate everyday living. The Kitchen Ambience Zone presented a contemporary culinary environment enriched with elegant finishes, demonstrating how functionality and elevated aesthetics coexist in modern homes.
The experience continued into the Bedroom Zone, an intimate and serene setting curated with soothing palettes and luxurious surfaces to create a tranquil retreat defined by comfort and understated elegance. Complementing this was the Bathware Zone — a sanctuary of calm showcasing precision-crafted porcelain surfaces that seamlessly blended purity of form with superior performance, redefining modern bathroom sophistication.
Extending beyond interiors, the Poolside Zone highlighted elegant outdoor settings framed by resilient, high-performance tiles, where aesthetic excellence met enduring strength in expressive interpretations of contemporary luxury. Featuring the latest Mosaic designs alongside the grand large-format tile series, Majestica, each zone illustrated how LANKATILES transforms raw materials into architectural poetry, reinforcing its leadership in innovation and design excellence.
Another defining feature of the Concept Studio was the AI-powered Tile Visualizer; an advanced digital interface designed to offer architects and homeowners an intelligent and immersive visualization experience that redefines the way interiors are selected and conceptualized. Within minutes, users can upload an image of their dream space and instantly explore precisely matched tile designs and colour palettes tailored to their aesthetic preferences.
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