There are no immediate plans to restrict vehicle imports despite pressure on foreign exchange reserves and global energy market volatility, the Ministry of Finance said on Friday (10).
The Treasury maintained that anticipated inflows, including the next International Monetary Fund (IMF) tranche, alongside existing market controls, would be sufficient to sustain stability without resorting to import curbs.
Treasury Deputy Secretary Ananda Kithsiri Seneviratne dismissed speculation of impending restrictions, stating that current reserve levels remained adequate.
“The Government does not have any plan to curtail vehicle imports. At present, there is no issue with foreign exchange reserves, particularly as the next IMF tranche is expected next month. Therefore, there is no need to impose import restrictions,” Seneviratne told The Sunday Morning.
When asked about a safe reserve threshold, he indicated that such determinations fell under the purview of the Central Bank of Sri Lanka (CBSL). The Sunday Morning could not, however, immediately verify the matter with the CBSL.
In view of the excess spending on fuel, Seneviratne expressed confidence that the vehicle market would self-regulate. He pointed out that the surge in demand following earlier import relaxations had already normalised.
In order to curb speculative behaviour and prevent stockpiling, the Ministry of Finance continues to enforce a regulation requiring 25% of imported vehicles to be registered within six months of arrival.
Industry stakeholders reported that fuel price volatility had not significantly impacted demand for private vehicles, though commercial transport segments may face pressure.
“Passenger vehicle demand remains stable and showroom movement is satisfactory,” Ceylon Automobile Importers’ Association President Prasad Manage said.
He also highlighted upcoming tax adjustments and evolving consumer preferences. An increase in the Social Security Contribution Levy (SSCL) is expected from May, while demand patterns within the market are shifting.
“There will be an impact from May due to a 1.25% tax increase, bringing the total to 2.5%. The initial demand for fully electric vehicles has tapered off, with consumers now leaning more towards hybrid options, which are seen as being more practical in the long term,” he added.