Sri Lanka extends foreign exchange controls for another six months

Sri Lanka extended foreign exchange controls for another six months on Friday in its latest bid to preserve the country’s dwindling currency reserves, Reuters reported.

The restrictions published in the country’s official gazette https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/laws/acts/en/dfe_gazette_20210702_2234_49_e.pdf, focus on limiting the amount of dollars Sri Lankans and local firms are allowed to send out of the country.

The curbs come as worries continue about the government’s ability to repay its debts, despite regular reassurances from ministers and officials that it will.

Mixed with the ongoing COVID-19 pandemic, apparent resistance to International Monetary Fund support and patchy demand in recent local debt auctions, market pressure has intensified, Reuters added.

Friday saw the worst day for the country’s government debt markets