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CB further tightens import restrictions to preserve stability of rupee

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100 per cent cash margin deposit imposed on non-essential imports

The Monetary Board of the Central Bank of Sri Lanka imposed a 100% cash margin deposit against the import of selected goods of non-essential or non-urgent nature category including mobile phones, televisions, watches, refrigerators, fruits, air conditioners, wine and beer.

Issuing a statement the CBSL said yesterday that the decision had been taken at a meeting held on Wednesday (08). Imports mentioned above, made under Letters of Credit and Documents against Acceptance terms with Licensed Commercial Banks and National Savings Bank, will be affected with immediate effect.

“The decision to impose the cash margin deposit requirement is expected to support the ongoing efforts to preserve the stability of the exchange rate and foreign currency market liquidity, particularly by discouraging excessive imports of speculative nature,” the CBSL said.

A summary of product categories that are subjected to cash margin deposit requirements are: Telecommunication devices (such as mobile telephones and fixed telephones), home appliances (such as fans, TVs, refrigerators, washing machines, digital cameras, hair clips, heaters, lamps, ovens), clothing and accessories (such as babies’ garments, hosiery, jerseys, nightdresses and pyjamas, overcoats, shirts and blouses, suits, track suits and swimwear, T-shirts, underwear, footwear, watches, sunglasses, other accessories), household and furniture items (such as furniture, lamp and lighting fittings, ornamental products, tableware and kitchenware, bed linen), rubber tyres, air conditioners, fruits (such as fresh apples, grapes, oranges and dried fruits, fruit juices), cosmetics and toiletries (such as perfumes, makeup preparations), beverages (such as beer, wine, mineral water and other beverages), other food and beverages (such as cereal preparations, starches, chocolates, malt, fish fillets, cheese, butter) and other non-food consumables (such as musical instruments, tobacco products, toys, stationery).

The total import cost of these items in 2019 was USD 1.05 billion in 2019, USD 871.2 million in 2020 and USD 753.4 million between January and July 2021.



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GL follows up Udaya’s initiative, negotiates concessionary crude oil supplies with UAE

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Balance-of-payment crisis continues to stagger govt.

By Shamindra Ferdinando

The United Arab Emirates (UAD) has agreed to discuss a possible arrangement to provide Sri Lanka crude oil on concessionary terms in the face of the country experiencing a severe balance-of-payments crisis, according to the Foreign Ministry.

Foreign Minister Prof. G.L. Peiris took up the matter with UAE Minister of Industry and Advanced Technology Dr. Sultan Al Jaber, on the sidelines of the 76th session of the United Nations General Assembly (UNGA) in New York. Prof. Peiris is on President Gotabaya Rajapaksa’s delegation to the UNGA.

In late August, Energy Minister Udaya Gammanpila sought the intervention of the Acting Head of the UAE Embassy in Sri Lanka, Saif Alanofy. Minister Gammanpila also met the Iranian Ambassador in Colombo in a bid to explore the possibility of obtaining oil from Iran on concessionary arrangements.

The Foreign Ministry statement on Prof. Peiris meeting with the UAE Minister dealt with the financial crisis experienced by the country. “Foreign Minister Peiris explained the challenges Sri Lanka is experiencing in respect of its external budget, as a result of the COVID-19 pandemic. Prof. Peiris focused in particular on the country’s requirement for oil and requested concessionary arrangements from the UAE.”

The Foreign Ministry quoted Minister Al Jaber as having said that the UAE would be happy to assist and proposed the establishment of a strategic framework to take the process forward.”

The ministry stressed that both sides agreed to follow-up rapidly.

Energy Minister Udaya Gammanpila earlier told The Island that concessionary arrangements were required to procure oil as part of an overall strategy to overcome the developing crisis.

Pivithuru Hela Urumaya (PHU) leader and Attorney-at-law Gammanpila said that increase in fuel prices in the second week of June this year was only a part of the government’s response to heavy pressure on foreign reserves. Minister Gammanpila said that the decision was taken close on the heels of dire warning from the Central Bank.

Minister Gammanpila said that in spite of foreign currency crisis, the government ensured an uninterrupted supply of fuel. According to him, Sri Lanka spent as much as USD 3.5 to 5 bn annually on oil imports depending on the world market prices.

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President attends 9/11 commemoration in NY

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President Gotabaya Rajapaksa yesterday attended the special commemorative event near the Manhattan Memorial in the United States to mark the 20th anniversary of terrorist attacks in Washington and New York.

The terrorist attacks took place on September 11, 2001, targeting the World Trade Center in New York and the Pentagon, the headquarters of the United States Department of Defence.

Coinciding with the 76th Session of the United Nations General Assembly, the United Nations Office of Counter-Terrorism and the 9/11 Memorial Museum jointly organised the event. Other Heads of State and government representatives, who were in New York to attend the UN General Assembly, were also present at the event to pay tribute to those who lost their lives in those attacks.

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FSP calls on govt. allies not to pretend to oppose adverse deal with US firm

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By Anuradha Hiripitiyage

Due to the secret agreement signed with US firm New Fortress Energy, Sri Lanka would soon face a situation akin to the one already faced by Ukraine, the Frontline Socialist Party (FSP) predicted yesterday.

“Sri Lanka is trying to reduce its dependency on coal and switch over to LNG. With this in mind, several coal and diesel power plants are to be converted into LNG in the coming decade. Now, we will entirely depend on the US to provide us with LNG to power these plants. Given that the US intends to control the seas in which Sri Lanka is placed strategically, they will not let us off the hook once they establish their foothold here. We are in deep trouble,” FSP Propaganda Secretary, Duminda Nagamuwa said.

Nagamuwa said that some constituents of the government were pretending that they opposed the transfer of government’s shares in the Yugadanavi Power Plant to New Fortress Energy. “But this is not the time for theatrics but for concrete action”, he said.

Nagamuwa said that the agreement between the government and US Company New Fortress Energy to construct a new offshore liquefied natural gas (LNG) receiving, storage and regasification terminal at Kerawalapitiya as well as the transfer of government’s shares in the Yugadanavi Power Plant had to be scrapped.

“Even government ministers agree that the agreement was not discussed with them. Several affiliates of the government are trying to convince the people that they are fighting this decision from inside. However, past experience has shown that when push comes to shove they will stay with the government. They must show the leaders of the government that they are not puppets,” he said.

Nagamuwa said that if those affiliated to the government were serious in their opposition to undermining Sri Lanka’s energy security they should show their commitment by doing something concrete.

The Yugadanavi Power Station at Kerawalapitiya already produced 300 MWs of energy and there was a plan to build another 350 MW plant there. The US Company had now been allowed to build an offshore LNG receiving, storage, and regasification terminal and to provide LNG to the existing Power Station and the new 350 MW power plant to be built, he said.

“Now we are under the power of the US. We will soon be facing the plight of Ukraine,” he said.

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