CB requests licensed commercial banks to refrain from entering into forward forex contracts for 3 months

The Central Bank of Sri Lanka (CBSL) yesterday (25) requested licensed commercial banks to refrain from entering into forward contracts of foreign exchange for a period of three months, with immediate effect.

“In view of the need to avoid excess volatility in the foreign exchange market and the impact on banks’ risk management, the licensed commercial banks are hereby informed to refrain from entering into forward contracts of foreign exchange for a period of three months, with immediate effect,” the Central Bank said in a direction.