Sri Lanka's central bank has asked banks to limit credit to buy motor cars, in a bid to reduce imports, as the country faced balance of payments pressure and lost more than a quarter of its foreign reserves.
The Central Bank said vehicle dealers had built up large inventories of cars over the past few months and banks may "prudently consider the limitation of credit for the import of motor vehicles, which would, in turn, lead to the easing of pressure on import expenditure."
Spot US dollar was quoted around 124.60/80 rupees in afternoon trade.
Sri Lanka has in the past jacked up taxes on goods considered by rulers and state officials to be 'luxury' for ordinary citizens, including motor cars which they get either completely tax free or at tax-slashed prices.
LBO
