Sri Lanka will review the import ban of vehicles in December while the temporary import restrictions on several goods would be relaxed gradually, said Governor Central Bank, (CBSL) Ajith Nivard Cabraal at an online event hosted by The Advocata Institute, on Saturday.
He however said that the import ban of vehicles would not be relaxed 100% as there would be a surge of imports and huge burden on the economy but would be done in a phased out systematic manner depending on ‘ground situation’ during the time. The Governor also said that the CBSL will release money from CBSL to purchase oil for the next three to four months and this will increase dollar liquidity as the dependence of the dollar becomes less.
He said that many people outline the economy in different angles and the duty of the Central Bank is to balance them and display the correct picture to all. “Presently there is economic instability due to various reasons such as the Pandemic and my priority in the next three months would be to bring economic stability and then go for our targets. For this we have spelt out a four month Road Map to be launched on October 1.”
He said that one common factor that hampered economic development in the past was key decision makers having different opinions. “However this has now stopped and today all top key decision makers work on a common agenda. One reason for President Gotabaya Rajapaksa to appoint me as Governor CBSL is to ensure that this is maintained even further.”
Asked to comment on the IMF he said that the country preferred to move forward with home grown solutions which have been very successful. “The best example is our vaccination program which is among the best in the world and no foreign body advised us in this regard and it was 100% managed and executed locally.”
“We also hope to maintain the same Interest rates for some period.”
He also said that Sri Lanka knows the importance of settling foreign debt in time and plans are afloat to settle them on time as done on previous occasions.
The Governor accepted that there is a ‘dollar crunch’ which he said is currently being addressed and would be settled sooner than expected. He said that there are no issues with regard to oil and other essential imports but admitted that there are certain shortages of milk powder and LP Gas and few other items.
“One reason for this is investors and even traders making huge uncalled for imports and stacking them and adopting a wait and see approach anticipating higher prices for their dollars and ‘stored’ stuff.”
“ We have made requests from several parties, especially exporters to bring in their dollars as well. We have identified these areas and will use several tools to address and intervene in this area as the CBSL has the legal powers and authority to do so to maintain growth and stability.”
Commenting on unutilized assets he said that these must be taken to prudent use by calling for investors to utilize them even helping to bring some FDI to the country though there are few negative sentiments towards this. He recalled that the President, when he was the Defense Secretary, converted the condemned Race Course building and Arcade at Independence Square to one of the best shopping malls and entertainment areas in the region.Asked to comment on some staff changes at CBSL he said: “Internal checks/internal controls and transfers usually happen in the banking sector for employees staying in the same position for longer periods (over three years) and this is why some transfers took place.”He said in the past too he was very keen and successfully executed ‘banking and economic reforms’ and these will happened in the future too along with ‘Merges and banking sector consolidation’