PM tells CBSL to reduce import restrictions on non-essential items

Thursday, 30 September 2021 00:24 - - {{hitsCtrl.values.hits}}

Prime Minister Mahinda Rajapaksa

Prime Minister Mahinda Rajapaksa yesterday instructed the Governor of the Central Bank of Sri Lanka (CBSL) Ajith Nivard Cabraal to minimise current import restrictions as much as possible on non-essential goods and

equipment.

The Prime Minister issued this directive considering the difficulties faced by entrepreneurs and the public due to the existing restrictions on imports of non-essential goods and equipment.

A statement from the PM's Office said Governor Cabraal is expected to render suitable suggestions in this regard shortly.

On 9 September the Central bank imposed 100% non-interest bearing cash margin deposit on the import of 623 products described as non-essential items. The move was to “support the ongoing efforts to preserve the stability of the exchange rate and foreign currency market liquidity, particularly by discouraging excessive imports of speculative nature”.

Despite over a year-long restrictions, import of these products in the first seven months of this year alone had reached a high of $ 753.4 million in comparison to $ 871 million in the entirety of 2020 and $ 1 billion in 2019. Overall imports in the first seven months have jumped by 30% to $ 10 billion as well despite restrictions. The 100% cash margin deposit move comes after the Central Bank fixed the maximum exchange rate to the US Dollar at Rs. 203 benefitting importers as opposed to Rs. 220 and Rs. 235 quoted previously by commercial banks.

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