Sri Lanka's central bank on Saturday announced that the amount of foreign currency an individual can hold has been reduced from 15,000 U.S. dollars to 10,000 or its equivalent in other foreign currency.

The central bank said the decision was taken to attract foreign currency into the formal banking system.

An amnesty period of 14 working days effective from June 16 is granted for persons holding foreign currency notes, during which they can deposit them into a foreign currency account or sell them to an authorized dealer, according to the central bank.

At the end of the amnesty period, the central bank said, it will initiate actions against anyone who violates the order, in terms of the provisions of the Foreign Exchange Act.

Sri Lanka has been facing crippling foreign currency shortages, which has made it hard to import essential items.