Sri Lanka - Program Credit Project

FILE COPY DOCUMENT OF INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use Report No. P-1494-CE REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF SRI LANKA FOR A PROGRAM CREDIT August 26, 1974 This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  CURRENCY EQUIVALENTS (as of July 1, 1974) Parity Rate US$1 = Rs 6.47 Rs 1 = US$0.155 Rs 1 million US$155,000 FEEC Rate US$1 = Rs 10.68 Rs 1 US$0.094 Rs 1 million = US$94,000 The Sri Lanka Rupee, which had been linked to the U.S. Dollar from November 6, 1971, was re-linked to the Pound Sterling from July 10, 1972 onward at a parity rate of 4 1.00 = Rs 15.60. Parity,rates with all other currencies are determined from time to time by the Central Bank. The Central Bank of Ceylon makes foreign exchange available for certain categories of imports through purchase of Foreign Exchange Enti- tlement Certificates (FEECs) for which a premium is charged. The same premium is offered to exporters on foreign exchange earnings from the sale of non-traditional goods. The net revenue from the sale of FEECs is credited to the Government's Revenue Account. The premium is present- ly fixed at 65 percent of the Rupee parity rate and results in an exchange rate of Rs 10.68 = US$1. This rate currently applies to about 20 percent of merchandise exports, about 60 percent of merchandise imports and to most invisible transactions with the exception of aid receipts. FISCAL YEAR January 1 to December 31  L'TTLI?RNATIOWAL DEVELOPr E'.T ASS OCIATION REPORT A1ND RECOM