Central Bank reserves poised to top USD 5 billion: State Minister

‘Commencement of loan repayments won’t make a dent in reserves’

By Sanath Nanayakkare

The amount of foreign reserves possessed by the Central Bank of Sri Lanka is now poised to exceed U5D 5 billion, and the commencement of foreign loan repayments in the coming months won’t make a dent in current reserves, State Minister of Finance Ranjith Siyambalapitiya told the media yesterday.

Responding to a query from the media whether the commencement of foreign debt repayments could see an immediate dip in the reserve levels, the state minister said that the whole objective of debt restructuring is to avert a significant depletion of foreign reserves.

“The debt restructuring process agreed with bilateral creditors and commercial creditors is being designed to ensure effective management of our foreign reserves. It is all about adjusting our loan repayments in line with the Central Bank’s foreign reserves. The Balance of Payment (BOP) transactions which consist of imports and exports of goods, services, remittances as well as transfer payments will be executed in a way that won’t put pressure on foreign reserves,” he said.

However, he mentioned that the government would not completely remove its ban on importing vehicles any time soon as it is a key measure of keeping tabs on foreign exchange outflows.

“The Central Bank acquired this desired level of foreign reserves by purchasing US dollars from the market. This is a favourable development. All import bans and restrictions have now been lifted except for vehicle imports. That too, we are opening according to emerging requirements. For example, we have allowed the importation of 750 vans and 250 buses to be deployed for tourist transportation as the requirement for it was justified. In a similar manner, vehicle imports will be allowed in accordance with the requirements. So, in future, vehicle imports will be allowed only if the government sees the genuine need for that,” he said.

When the Island Financial Review contacted Ranjith Sudasinghe, vice president of Sri Lanka Chauffeur Tourist Guide Lecturers Association, he said that members of their Association would be at risk when they don’t get new vehicles for tourist transportation while only select big companies in the industry would get them.

“We have made repeated appeals to Sri Lanka Tourism authorities pointing out that our vehicles are old and tourists won’t find them appropriate for a round-tour of Sri Lanka. Even Destination Management Companies (DMCs) would reject our vehicles when they get new vehicles. So, the authorities should create a level playing field for all tourist transportation stakeholders. The government should consider allowing us to import vehicles at a concessional duty rate after an assessment of the conditions of our vehicles. Farmers get fertilize subsidies, fisher folks get facilities from the government. But the chauffeur guides are receiving a step-motherly treatment from the authorities which is not fair. We are only asking to replace our old tourist vehicles with news ones at a concessional duty rate. At present we are charging less than what a three-wheeler charges per kilometer because we are told to be competitive with fares in the regional countries. Now with the new tourist vehicles coming in and we have been left out of the process, we are going to be squeezed out of our livelihoods,” he said.