The Government plans to lift import restrictions on a further 800 items by December this year, a senior Treasury official revealed.
Import restrictions were lifted on nearly 300 items recently. The further lifting of restrictions is being undertaken in line with a target given by the International Monetary Fund (IMF) for Sri Lanka to lift import restrictions gradually while being mindful of the rupee depreciation.
“We can’t keep these restrictions indefinitely,” the official said. He noted that the country’s foreign reserves now stand at USD 1.6 billion. It was a mere USD 200 million about a year ago. As part of efforts towards a gradual economic recovery, the IMF has given Sri Lanka a target to build the country’s foreign reserves by a further USD 1 billion by the end of the year, the official added.
Relaxing the import ban on vehicles, however, is not yet possible due to the damage it would inflict on foreign reserves, said the official. The rupee fell steeply earlier this week before rallying by Friday. State Finance Minister Ranjith Siyambalapitiya told the media this was mainly due to the Government having to spend between USD 75 to 80 million on fuel imports for the Ceylon Petroleum Corporation this week.
“For the moment, we will only lift import restrictions on items that will do the least amount of damage to our foreign reserves. We will not be removing restrictions on vehicle imports due to this reason. Once we restart vehicle imports, about USD 1.5 billion will be lost from our foreign reserves annually,” said the official.
With the vehicle import ban still in place, the biggest strain on the country’s foreign reserves comes from mega road development projects. Given this situation, the Treasury has put all but the most essential of such projects on hold until at least December.
Additionally, all projects that cost more than Rs 10 billion have also been suspended indefinitely. The Treasury official noted that the projects will remain on hold for the foreseeable future until debt restructuring – both foreign and domestic – has been completed, and the Government obtains a clear picture of how much it has to pay.
- https://www.sundaytimes.lk/230618/n...er-vehicle-import-ban-to-continue-523260.html
Import restrictions were lifted on nearly 300 items recently. The further lifting of restrictions is being undertaken in line with a target given by the International Monetary Fund (IMF) for Sri Lanka to lift import restrictions gradually while being mindful of the rupee depreciation.
“We can’t keep these restrictions indefinitely,” the official said. He noted that the country’s foreign reserves now stand at USD 1.6 billion. It was a mere USD 200 million about a year ago. As part of efforts towards a gradual economic recovery, the IMF has given Sri Lanka a target to build the country’s foreign reserves by a further USD 1 billion by the end of the year, the official added.
Relaxing the import ban on vehicles, however, is not yet possible due to the damage it would inflict on foreign reserves, said the official. The rupee fell steeply earlier this week before rallying by Friday. State Finance Minister Ranjith Siyambalapitiya told the media this was mainly due to the Government having to spend between USD 75 to 80 million on fuel imports for the Ceylon Petroleum Corporation this week.
“For the moment, we will only lift import restrictions on items that will do the least amount of damage to our foreign reserves. We will not be removing restrictions on vehicle imports due to this reason. Once we restart vehicle imports, about USD 1.5 billion will be lost from our foreign reserves annually,” said the official.
With the vehicle import ban still in place, the biggest strain on the country’s foreign reserves comes from mega road development projects. Given this situation, the Treasury has put all but the most essential of such projects on hold until at least December.
Additionally, all projects that cost more than Rs 10 billion have also been suspended indefinitely. The Treasury official noted that the projects will remain on hold for the foreseeable future until debt restructuring – both foreign and domestic – has been completed, and the Government obtains a clear picture of how much it has to pay.
- https://www.sundaytimes.lk/230618/n...er-vehicle-import-ban-to-continue-523260.html
