Sri Lanka plans 100-pct LC margin on luxury car imports
ECONOMYNEXT – Sri Lanka is planning to impose a 100 percent margin on letters of credit on luxury car imports, official sources said, as the rupee fell to new lows against the US dollar.
Sri Lanka has a habit of curbing car imports after de-stabilizing a soft-peg with the US dollar.
Analysts have called for fundamental reforms of the unstable soft-peg to enable to country to engage in free trade while some have called for the central bank to be abolished in favour of a currency board.
Sri Lanka had earlier raised taxes on small cars after printing money.
Taxes have also been raised on gold, putting obstacles on the jewelry industry.
Some import restrictions (multiple currency practices) run counter to Sri Lanka’s membership of the International Monetary Fund. (Colombo/Sep20/2018)