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Contents

Part VI · Foreign Exchange Operations and International Reserves

40. Management of international reserves

Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk

(1)

The Central Bank shall manage the official international reserves consistent with international best practices and the rules made by the Governing Board having regard to the safety, liquidity and return in that order of priority.

(2)

The international reserves of the Central Bank may include the following assets –

(a)

gold including credit balances representing such gold;

(b)

assets denominated in freely convertible foreign currencies in the form of –

(i)

foreign notes and coins held by or to the credit of the Central Bank;

(ii)

credit balances and interbank deposits that are payable on demand or within a short term held in the accounts of the Central

Bank, on the books of foreign central and commercial banks, or international financial institutions;

(iii)

readily-marketable debt securities issued by, or supported by foreign governments including provincial governments, foreign central banks, international financial institutions and agencies;

(c)

either the whole, or such maximum percentage of the whole, of the holdings of such drawing rights in the International Monetary Fund as may be determined from time to time by the Governing

Board; and

(d)

any other readily-marketable financial assets denominated in freely convertible foreign currencies as determined by the Governing Board.

(3)

In the event, the Central Bank is satisfied that there is a decline or a likelihood of decline in the international reserves, or such reserves may reach to a level that could jeopardize the objects of the Central Bank, and that the

Central Bank is unable to remedy such decline by its own measures, the Central Bank shall report to the Minister in writing of such decline including reasons for and recommendations to remedy such decline.

Part VII

Currency and Legal Tender

Part VIII

Payment and Settlement Systems

Part IX

Supervision and Resolution of Financial Institutions

Part X

Macroprudential Authority

Part XI

Financial System Oversight Committee

Part XII

Information Exchange with Financial Sector Authorities

Part XIII

Statistics and Information

Part XIV

Relationship with the Parliament, the Government and the Public

Part XV

Credit Operations

Part XVI

Financial Provisions

Part XVII

Internal and External Audits

Part XVIII

General Provisions

Part XIX

Repeals and Savings