No reversal on vehicle import liberalisation, assures President Dissanayake

• Shares US$ 150 mn worth LCs been opened since the liberalisation of vehicle imports
• Asserts measures have been taken to prevent excessive pressure on the rupee
• Vehicle imports previously peaked at US$ 1.95 bn in 2018 and US$ 900 mn in 2019 before restrictions were imposed

President Dissanayake speaking at COYLE’s 26th anniversary event in Colombo  Pic by Kushan Pathirajah

By Nishel Fernando

President Anura Kumara Dissanayake reaffirmed that the government would not reintroduce import controls on vehicles, noting that US$ 150 million worth of Letters of Credit (LCs) have been opened since the liberalisation of vehicle imports.

He emphasised that the government closely monitors vehicle import data from the banking system on a daily basis.
“As of 10 February, there were US$ 150 million worth of LCs were opened,” he said.

Speaking at the 26th anniversary of the Chamber of Young Lankan Entrepreneurs (COYLE) in Colombo, Dissanayake addressed concerns over a potential policy reversal. “You may have doubts that we will revert back to import controls, but I am telling you that you don’t need to fear as we have opened the vehicle imports strategically based on a well-thought-out plan ensuring that we wouldn’t have to go back to import controls,” he said.

He highlighted that measures have been taken to prevent excessive pressure on the rupee. Vehicle imports previously peaked at US$ 1.95 billion in 2018 and US$ 900 million in 2019 before restrictions were imposed.
Commenting on rising vehicle prices, Dissanayake attributed the increase primarily to the rupee’s depreciation over the past five years and higher costs in exporting countries rather than taxation.

Meanwhile, he underscored the importance of continuing the International Monetary Fund (IMF) programme to restore confidence in Sri Lanka’s banking system.

“How much you struggled to open a LC earlier?” he asked.

He also announced that the government has postponed the replacement of the Simplified Value Added Tax (SVAT) system for exporters and delayed the proposed property tax until next year.

Dissanayake pointed to several indicators of economic stability, including a steady exchange rate in recent months, single-digit interest rates, and sovereign credit rating upgrades by international agencies.