CBSL Issues Stern Warning Against Local Foreign Currency Transactions 🏛️

The Central Bank of Sri Lanka (CBSL) has issued a public warning regarding unauthorized foreign currency transactions between residents, reiterating that the Sri Lankan Rupee is the sole legal tender for domestic trade. • Regulatory Mandate: Under the Central Bank of Sri Lanka Act, No. 16 of 2023, all transactions between residents must be settled in local currency unless specifically authorized under the Foreign Exchange Act. • Prohibited Activities: Merchants are strictly barred from accepting foreign currency payments from local customers. This includes converting Rupees into foreign currency for credit to foreign currency accounts via Credit or Debit cards. • Legal Consequences: Violators (both payers and merchants) face summary trial before a Magistrate. Convictions carry severe penalties: • A fine up to Rs. 25 million. • Imprisonment for a term up to 3 years. • Or both penalties combined. • National Context: These measures are designed to preserve the integrity of the monetary system and ensure the stability of the domestic currency market. The CBSL urges the business community and the public to comply with statutory requirements to avoid legal action. _Source: Central Bank of Sri Lanka (February 2026)_