ECONOMYNEXT – Sri Lanka has canceled 216 letters of credit involving 14,000 vehicles after a vehicle import ban imposed on March 2020, the island’s motor traders said appealing for the vehicles to be imported amid state proposal to import luxury SUVs for members of parliament.
When Sri Lanka banned vehicle imports in March 2020 LCs of 10,780 motor cycles, 2,640 trishaws and 537 cars specially ordered to suit Sri Lanka’s market conditions were blocked.
Sri Lanka’s current administration has ordered luxury vehicles to be given to parliamentarians which were initially put on hold after a public outcry.
Ceylon Motor Traders Association said it agreed with Minister Keheliya Rambukwelle’s statement that cancelling LCs affected the credibility of banks in Sri Lanka.
Sri Lanka has ‘regime uncertainty’ or sudden policy changes and state interventions, sometimes based on Keynesianism which worsens uncertainty and leads to expropriation or losses of private businesses.
“The vehicle import ban imposed last year has taken a toll on vehicle buyers by constricting the market at a time when the need for personal transportation is more acute,” Ceylon Motor Traders Association said.
“To make matters worse, the resulting imbalance of demand vs. supply has caused prices of used vehicles skyrocket within a short time span, and has led to unscrupulous activities at the expense of the consumer, such as odometer tampering.”
The vehicles which were halted were valued at 5.2 billion rupees and included those of the general public and state workers such as doctors who held permits, the CMTA said.
If SUVs are allowed to parliamentarians, CMTA said vehicles of others should also be allowed. (Colombo/June15/2021)