BCN-44 Sri Lanka restricts car imports as currency crashes

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ZCZC

BCN-44

SRILANKA-ECONOMY-CARS-TRANSPORT

Sri Lanka restricts car imports as currency crashes

COLOMBO, Sept 29, 2018 (BSS/AFP) – Sri Lanka announced a raft of restrictions
Saturday in a bid to slow down imports of cars and luxury goods as the
country faces a foreign exchange shortage.

The finance ministry banned the import of vehicles for all state
institutions for one year and said public servants will not be allowed to
import cars at concessionary duty rates for six months.

Banks were also ordered to restrict credit to finance the purchase of
vehicles, air conditioners, perfumes, mobile phones and TV sets, among other
luxury consumer goods.

The local currency has lost more than 10 percent of its value against the
US dollar this year. The dollar, which bought 155 rupees at the start of the
year, has appreciated and was buying 170 rupees by Friday.

In August, the government substantially increased taxes on small cars to
discourage imports, but officials said there was still pressure on foreign
exchange reserves to finance big-ticket imports.

The central bank had warned that car imports had inflated the trade deficit
by $700 million year-on-year to $4.9 billion for the first five months of
2018.

BSS/AFP/SR/1850 HRS