- LCs opened within expected parameters: CBSL
Despite Letters of Credit (LCs) for vehicle imports nearing $ 1.6 billion, the Government remains confident that the surge will not strain Sri Lanka’s foreign exchange reserves.
When contacted by The Sunday Morning, senior officials including Director General of Customs Seevali Arukgoda, Deputy Secretary to the Treasury Ajith Abeysekera, and Cabinet Spokesperson and Minister of Health and Mass Media Dr. Nalinda Jayatissa stressed that the inflows were being managed in coordination with the Central Bank of Sri Lanka (CBSL) and remained consistent with the country’s economic programme.
Arukgoda confirmed that, apart from the one-vehicle-per-year restriction on private individual imports, there was no official foreign exchange ceiling on commercial vehicle imports.
“There is no threshold. Any amount of imports can come in; there is no problem,” he said. “It will not negatively affect foreign reserves. The Government is comfortable with the outflow.”
Dr. Jayatissa also underlined that the CBSL had not raised concerns over the import volume. “We are doing it in cooperation with the Central Bank. From our discussions with the CBSL, there has been no communication whatsoever that the scale of imports will affect foreign reserves.”
Echoing this view, Deputy Secretary to the Treasury Abeysekera noted that the $ 1.57 billion in LCs opened to date fell within the expected parameters under the ongoing International Monetary Fund (IMF)-supported economic framework.
“It does not look like it will impact foreign reserves. All are within the parameters we expected,” he said, adding that the presence of the IMF team in Sri Lanka was further assurance of the country’s adherence to its agreed path. “We are not deviating.”
The officials also confirmed that the State was seeing a major fiscal benefit from the surge, with revenues from vehicle imports already surpassing expectations. Customs expects the final figure to exceed Rs. 700 billion, providing a significant boost to Government coffers after the multi-year ban on imports was lifted.
Abeysekera attributed the sudden spike to pent-up demand following years of restrictions, suggesting that the trend was unlikely to continue at the same pace. He noted that import demand had peaked in mid-July and August and was already stabilising.
He added that the Government’s reserve accumulation targets under the IMF programme remained the key safeguard. “In terms of reserves we have to build, the target is around $ 7.5 billion by the end of this year. We can manage up to that. There are no obstacles,” he said.