Sri Lanka halts imports of over 300 items
ECONOMYNEXT – Sri Lanka has halted imports over 300 items from August 23 until further notice in a gazette issued under the hand of President Ranil Wickremesinghe as Finance Minister.
The goods loaded until August 23 will be allowed to be cleared by customs until September 14.
The ‘temporarily suspended’ items include dairy products, cosmetics, electrical goods, water craft, ships, aircraft, electrical and electronic goods and building material.
Some industrial machinery including metal working machinery, packing machines and ball bearings have also been halted.
The trade restrictions are made under Sri Lanka’s Import and Export Control Act enacted in 1969.
The import controls were imposed after foreign reserves fell to 40 million US dollars after the central bank printed money to re-finance rural credit under then Prime Minister Dudley Senanayake who lost the subsequent election.
Sri Lanka’s economists have printed money under various pretexts to keep rates down and blown the balance of payments apart for 72 years.
After 1980 accelerated depreciation was seen under the BBC (basket, band, crawl) style policy made popular by Washington based Mercantilists, triggering severe monetary instability and social unrest.
Sri Lanka built a Latin America style intermediate regime (soft-pegged) central bank in 1950 denying monetary stability to the newly independent nation shattering a bright future as an independent nation with trade and exchange controls.
Repeated currency troubles and economic hardships from the soft-peg, helped bring collectivists, interventionists and nationalists to power while discrediting free trade.
After 2014 Sri Lanka started deploying aggressive open market operations against the soft-peg under flexible inflation targeting, and eventually brought the country to default. (Colombo/Aug23/2022)