CB applies brakes on vehicle imports, non-essential goods

Friday, 20 March 2020 00:30 - - {{hitsCtrl.values.hits}}

Says move to ease pressure on exchange rate as Rupee falls
Maximum foreign currency for travel limited to $ 5,000

The Central Bank yesterday applied brakes on the import of vehicles and non-essential goods to ease pressure on the exchange rate and prevent financial market panic due to the COVID-19 crisis.

It has directed commercial banks and the NSB to adopt the following measures during the next three months, with immediate effect:

Suspend facilitating importation of all type of motor vehicles, other than those excluded specifically under Banking Act Directions No.01 of 2020, under Letters of Credit.

Suspend facilitating importation of non-essential goods specified in Banking Act Directions No. 01 of 2020 under Letters of Credit, Documents Against Acceptance and Advance Payment.

Suspend the purchase of Sri Lanka International Sovereign Bonds by licensed banks in Sri Lanka.

The Central Bank also limited Authorised Dealers of foreign exchange to issue foreign currency notes as travel allowance only up to a maximum of $ 5,000 (or its equivalent in other foreign currency).

“The Central Bank will continue to monitor market developments and take further measures as required, while ensuring adequate liquidity in the market in order to facilitate smooth operations and sustain market confidence amidst the COVID-19 outbreak,” it said in a statement.

In the Forex market, the USD/LKR rate on spot contracts was traded within the range of Rs.186.75 to Rs.187.00 yesterday against its previous days of Rs.185.40 to Rs.185.50.

New stimulus for key sectors hit by COVID-19

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