The Central Bank of Sri Lanka (CBSL) has directed licenced commercial banks (LCBs) to impose a 100% margin deposit requirement against letters of credit (LCs) for the importation of motor vehicles with immediate effect.
In a statement the CBSL said the decision to impose the margin deposit requirement is based on recent developments which, if not addressed, could threaten macroeconomic stability. These include the following:
- Recent global financial market volatility and generalised pressure on currencies of emerging market economies
- Continued excessive motor vehicle imports, partly driven by unwarranted speculation on future exchange rate movements, interest rates movements and budgetary measures