Sept 19, Colombo: The Central Bank of Sri Lanka has issued a directive on foreign exchange trading activities of licensed commercial banks.

The Central Bank has issued the Banking Act Direction No. 1of 2012 in order to further improve the standard of business conduct and good market practices for the effective and efficient functioning of the foreign exchange trading activities in the country, the Bank said in a statement today.

The Direction which has been prepared after a consultative process with the respective stakeholders and considering the international best practices, broadly covers the market practices, internal policies and procedures, ethics and standards to be practiced in conducting foreign exchange trading activities, according to the monetary authority.

"This Direction will be of significant importance and value since the smooth and efficient functioning of a foreign exchange market depends on the orderly conduct of foreign exchange trading activities with high professional standards," the statement said.

Further, as the market grows in size, diversity and complexity, the demand for uniform practices increases correspondingly, the statement noted.