The Central Bank of Sri Lanka (CBSL) has ordered the imposition of a 100 per cent cash margin deposit requirement against the importation of non-essential goods made under letter of credit (L/C) and documents against acceptance (D/A) terms.

The order applies to licensed commercial banks and the National Savings Bank with immediate effect.


The decision to impose the cash margin deposit requirement aims to support Sri Lanka's ongoing efforts to preserve the stability of the exchange rate and foreign currency market liquidity, particularly by discouraging excessive imports of a speculative nature.

A wide range of goods, including telecommunication devices, home appliances, clothing and household items as well as some food and beverages are subject to the order.

Financial sector stability

Sri Lanka is facing a severe foreign exchange crisis. Reserves have dwindled to barely enough to pay for three months of imports. The pandemic has had a substantial impact on the country's tourism industry, a key foreign exchange earner.

New CBSL governor, Ajith Nivard Cabraal, said in his initial statement after taking office on 15th September that the bank's first and urgent priority is to ensure stability in the financial sector.

The bank will "soon announce a policy package in the form of a short-term roadmap", he said.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.