Sri Lanka today announced the easing of foreign exchange controls to allow foreigners to repatriate capital as well as profits from real estate transactions.
The Central Bank of Sri Lanka said it was making it easier for both foreigners and locals to take money in and out of the country as part of measures to spur greater economic activity.
Sri Lanka's economic growth slowed to 6.4 per cent in calendar year 2012, from 8.2 per cent the previous year.
The exchange controls were eased because "the domestic financial sector has become stronger and more resilient", the Bank said in a statement.
It said Sri Lankan commercial banks will also be allowed to lend in foreign currency for the first time to locals who earn abroad.
Sri Lanka has over two million of citizens employed abroad, especially in the Middle East, who sent home USD 5.9 billion last year, making remittances the biggest single source of hard currency for the country.
Sri Lanka sharply raised import taxes in 2011 to avoid a repeat of a 2009 balance of payments crisis.
A three per cent depreciation in 2011 followed by a free float of the local currency saw the value of the rupee fall sharply and made imports more expensive while reducing pressure on the trade balance.
