As a measure to avert the foreign exchange crisis Sri Lanka is facing at the moment, the country is expected not to import any vehicles in 2022, while also not recruiting any new people to the public sector, according to Minister of Finance Basil Rajapaksa.
“There will not be vehicle imports or public sector recruitments next year,” he added.
Rajapaksa stressed that the country might get into an economic crisis due to its dwindling foreign exchange reserves, which, according to the Government, is at $ 1.5 billion at the moment, and added that there is nothing to hide about the country’s current situation.
He also pointed out that worker remittances have dropped this year compared to the previous year, which in turn has affected the country’s foreign currency reserves significantly due to the number of Sri Lankans who migrate overseas for work dropping sharply.
“However, at the moment, it has been increased to 100,000. The target for next year is to increase the number of migrant workers to 300,000,” Minister Rajapaksa added.
State Minister of Samurdhi, Household Economy, Micro Finance, Self-Employment, and Business Development Shehan Semasinghe confirmed that Sri Lanka’s net foreign assets are worth $ 1.507 billion as of November 2021, and the Government is currently working on the necessary measures to increase its reserves.
He made this statement while speaking in Parliament yesterday (9).
“We have made the necessary arrangements to obtain $ 500 million through currency swaps with the partnership of various global commercial banks. Sri Lanka aims for a $ 12 billion export revenue by the end of 2021,” said Semasinghe.
He went on to detail the steps taken by the Government of Sri Lanka to increase the reserves.
“A $ 1 billion swap facility with the Central Bank of Qatar, a $ 400 million swap facility with the Reserve Bank of India through the South Asian Association for Regional Co-operation (SAARC), and a $ 300 million loan from the Consolidated Loan Facility will add the boost to the foreign reserve. Foreign remittances will play a vital role as well,” he said.
Semasinghe also mentioned that during the recent visit to India, Minister Rajapaksa has had discussions with the Indian Government regarding the purchase of fuel, essential goods, and medicines.
Strict restrictions were placed on vehicle imports in early 2020 to curb foreign exchange outflows, following the significant loss of foreign exchange inflows from tourism amidst the Covid-19 pandemic.
Such restrictions are imposed by Gazette Extraordinary Notification No. 2176/19, dated 22 May 2020, which was published to amend the regulations that were stipulated by Gazette Extraordinary Notification No. 2171/5, dated 16 April 2020.
This resulted in a situation where there were no new vehicles in the market and consequently the lack of supply to match the demand for new vehicles resulted in a steep increase in vehicle prices.