Sri Lanka plans to sell tickets in US dollars to tourists: Minister
ECONOMYNEXT – Sri Lanka is considering selling tickets to tourists in US dollars in a bid to raise money to import spare parts amid a currency crisis, Transport Minister Bandula Gunawardana said.
“I plan to ask permission from the central bank to charge for tickets in US dollars,” Minister Gunawardana said.
“Hotels charge in US dollars, I do not see why we cannot.”
Sri Lanka railways is finding it difficult to import spare parts for its old engines, he said. Minister Gunawardana hiked fares to half that of buses and has somewhat reduced operations losses, he said.
Minister Gunwardana has also proposed to call international tenders to sell metal scrap to raise dollars for Sri Lanka Railways.
Sri Lanka has an intermediate regime central bank (a soft-peg) which collapses and forex shortages emerge whenever aggressive open market operations are employed (liquidity is injected) to artificially suppress interest rates.
Sri Lanka’s economists got the power to print money in 1950 as a currency board was abolished to pave the way for a Latin America style central bank, though they were not explicitly given the power to depreciate the currency as they were required to maintain a peg to gold at 1.99 grains.
However the rules were relaxed in 1980s and it was made earlier to depreciate the rupee to compensate for monetary policy errors as basket, band, crawl (BBC) policy was peddled to the third world by Washington based Mercantilists, critics say.
Latin America style central banks also started to default from the 1980s.
Once the power was given, economists are now unwilling to give up the power to print money and depreciate the currency though calls are intensifying to harden the peg block monetary instability.
Over the year economists have lobbied politicians to control and exchange control and import control laws and curtail the economic freedoms of citizens during successive currency crises and money printing depleted reserves.
Money laundering laws were deployed against citizens who use US dollars in the current crises. (Colombo/Sept27/2022)