CBSL unveils six month road map to revive COVID-19 hit economy; cash margin restrictions reversed

The Central Bank of Sri Lanka (CBSL) today lifted cash margin restrictions imposed earlier on importation of non-essential items and urged importers to give priority for necessary items.

Unveiling Sri Lanka’s “Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability’, Governor Ajith Nivard Cabraal proposed a three-pronged framework to strengthen the economy and deliver macroeconomic stability. 

The roadmap is expected to address the country’s serious foreign exchange crisis and offer solutions to overcome the acute shortage of foreign currency.

According to the policy document, despite recording more than USD 500 million per month consecutively from June 2020 till April 2021, workers’ remittances moderated in recent months.

The prevailing large exchange rate anomaly between official and unofficial channels, which drives foreign exchange earners to use unofficial channels, and the dwindling number of departures could be the major contributing factors for this behavior, the policy statement noted. 

In its policy recommendations, the CBSL has also suggested to consider a mechanism to allow import of motor vehicles to SL using foreign earnings or FDIs with relevant taxes being paid to the government in forex.

(Pix & video by M A Pushpa Kumara)