The Central Bank is also planning to give relaxation to tourists who were made to pay the hotels in dollars….reports Asian Lite News
Sri Lanka’s Central Bank has announced that they will remove the regulations that made the exporters convert their foreign currency earnings into rupees in the coming future.
In recent months the central bank has imposed various regulations that forced the exporters to convert their US dollars within a period of time to support the island nation’s foreign reserves, Xinhua News Agency reported.
Addressing a press conference, Central Bank Governor Nandalal Weerasinghe on Friday said, “For services exports like IT and tourism, we will remove the mandatory conversion requirement.”
“We have no way to track these services. Apparently, some exporters are not bringing in foreign currency they make because of the mandatory conversion rule,” he added.
He added that the central bank is also planning to give relaxation to tourists who were made to pay the hotels in dollars, reported Xinhua.
Earlier in the day, Sri Lanka’s central bank governor said domestic debt in the form of government securities and development bonds will not be restructured as restructuring external debt is a top priority for the island nation.
Central bank governor Nandalal Weerasinghe also provided an update on the progress made during the recent discussions with the International Monetary Fund (IMF) and World Bank.
Addressing a meeting of the Committee of the Ceylon Chamber of Commerce, he said progress has been made towards establishing a macro-fiscal policy framework and initiating structural reforms.
The central bank governor also expressed confidence that a staff-level agreement with the IMF is likely to be reached within the next two months.
Weerasinghe announced that additional measures will be implemented to address urgent economic concerns, reported Xinhua.
The measures include introducing regulations to encourage the U.S. dollar flows currently transacting in the informal market to be channelled through the formal banking system.
As a result of policy measures already introduced by the central bank and the government, he is of the view that expenditure on imports will be declining further to more sustainable levels.
Sri Lanka is going through an economic crisis brought about by foreign currency shortages and it halted external debt repayment on April 12.
Drug price hikes
Adding more burden to the staggering economy of the island nation, the Health Minister of the country Channa Jayasumana issued a special gazette order on Thursday stating a dramatic price hike in the pharmaceutical drugs, yet again shooting up the prices of 60 drugs up by 40 to 60 per cent, reported local media.
This decision will impact the most commonly used medicines as their rates are expected to spike.
Further, the Health Minister has instructed all the medical professionals to adhere to the gazette notification, maintaining the price, as reported by Colombo Page.
“Every trader, distributor, pharmacist, medical practitioner, dentist, veterinary surgeon, medical institution including a private medical institution, pharmacy or person who or which is in possession of the Scheduled Medicines for the purpose of sale shall maintain the price of the Scheduled Medicines at the maximum retail price or revised retail price whichever is less,” states the gazette notification issued by Jayasumana.
Presently, Sri Lanka is facing one of the worst economic woes since gaining independence in 1948. It is grappling with food and electricity shortages, affecting many people, forcing the country to seek help from its neighbours. The recession is attributed to foreign exchange shortages caused by a clampdown on tourism during the COVID-19 pandemic. It has left the country unable to buy enough fuel, with people facing an acute scarcity of food and basic necessities, heating fuel, and gas. (ANI)