Central Bank Governor Dr. Nandalal Weerasinghe has assured that Sri Lanka’s reserves and debt repayment will not be affected even if vehicle imports increase to US$ 1.5 billion a year.
Speaking during an interview with local television, Dr. Weerasinghe said that this could cause a small deficit in the current account deficit, instead of the much higher deficit seen in the past.
He said that after completing debt restructuring, the government can maintain reserves, make the required payments, increase government revenues, and balance the requirements, even if vehicle imports increase to US$ 1.5 billion.
His comments were in reference to the Central Bank’s projection that in 2024 relaxing commercial vehicle imports would result in forex needs of about US$ 500 million and private vehicle imports may require another billion US dollars a year.
The Central Bank Governor also noted that due to the depreciation of the Rupee and the imposition of a higher Value Added Tax (VAT), the cost of a new imported car has risen.
Dr. Nandalal Weerasinghe said, in his opinion, the government may have to maintain taxes at a level that does not result in a steep fall in second-hand vehicles.
“We must allow a person who wants a new vehicle to buy, but without encouraging people who do not want a new car to buy one. We have to balance it. But it is a fiscal policy of the government,” he added. (Newswire)