ECONOMYNEXT – Sri Lanka’s Prime Minister Mahinda Rajapaska had proposed to provide 50 million US dollars to pay for shippers and clear containers stuck at port, at this week’s cabinet meeting, Consumer Protection Minister Lasantha Alagiyawanna said.
“There are some containers with imports made against import controls,” Minister Alagiyawanna said.
“There are about 800 others which are essential items such as lentils have been imported under existing laws.
“The Prime Minister asked the Finance Ministry to release foreign currency to clear the containers.”
“There are others which have been brought against regulation, which will be confiscated and released to Lanka Sathosa.”
It is not clear whether the dollars would be released by the central bank.
Sri Lanka has been printing money to keep interest rates low and finance a budget deficit.
The liquidity, when spent by state workers or used to pay suppliers to the government, create import demand driving outflows above imports.
The central bank has imposed a 203 to the US dollar price control on the exchange rate without giving convertibility, driving remittance out of official channels. (Colombo/Sept28/2021)