Sri Lanka import controls are temporary: CB Governor

ECONOMYNEXT – Sri Lanka’s recent import controls are temporary and can be removed when the external situation improves, Central Bank Governor Nandalal Weerasinghe said.

“These are temporary measures,” Governor Weerasinghe said at a forum to promote inward remittances through a new application.

“We have to conserve limited resources. As the situation improves we can remove these controls.”

Some items like vehicles, fridges are not immediately essential, and can be delayed he said.

“There will be impact on businesses,” Governor Weerasinghe said.

The latest import bans, especially on machine parts and some industrial items has caused concern.

Concerns have also been raised on some material affecting small businesses including carpentry.

Sri Lanka is in the habit of slamming import control on ‘non-essential’ items, vehicles or gold, after liquidity injections from either open market operations to keep rates down or sometime outright financing of the deficit with central bank credit creates forex shortages.

However Governor Weerasinghe has taken the key measure and allowed interest rates to go up, reducing money printing, private credit has fallen, reducing outflows and the demand for foreign exchange.

A forced conversion of service sector inward remittances had also been ended. (Colombo/Aug28/2022)