While unveiling the Central Bank of Sri Lanka’s (CBSL) ‘Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability’ today (01), Governor of the CBSL Ajith Nivard Cabraal stated that cash margin deposit requirements for the import of non essential and non urgent goods have been discontinued with immediate effect.
The six-month roadmap for ensuring macroeconomic and financial system stability was unveiled this morning.
The roadmap was unveiled by Governor of the Central Bank of Sri Lanka Ajith Nivard Cabraal at a ceremony held at the CBSL this morning.
The Governor of the Central Bank said the new economic plan has been formulated with the aim of ensuring stability of macroeconomic and financial systems during the next six months.
Ajith Nivard Cabraal said the plan has been formulated covering all the major sectors of the country.
Such a move was a part of the 20 point plan detailed by Cabraal in order to bring the country out of its current economic situation. Other points listed by the Governor are detailed below:
- Intervene in the FX market by providing the funds to finance the country’s energy bills, and thereby to infuse liquidity
- Promote investments in Rupee denominated government securities with a guarantee on the exchange rate
- Strengthen mandatory conversion of export proceeds
- Request the government to tax profits of exporters at 28% and not 14% where forex is not repatriated and converted
- Expand the moratorium while also providing liquidity support to affected finance companies
- Stop executions and repossession of vehicles in the next six months for pandemic affected borrowers.
- Share the burden of endemic losses suffered by local SMEs by allocating Rs 15,000 mn towards interest accrued
- Use monetary policy tools to unwind monetary stimulus extended during the pandemic
- Use macroprudential tools as well as regulation and supervision to guide the financial sector towards stability
- Facilitate education and health related forex outflows immediately
- Lift the ceiling on outward investment and migration allowances in Jan 2022
- Establish ITRS system to monitor forex transactions from Jan 2022
- Monitor services related to forex inflows and ensure due repatriation and conversion
- Replace maturing debt obligations with new inflows through non debt sources
- Consider possibility of buying back the entire issue of ISBs maturing in Jan 2022 and/or July 2022, if high discounts are prevalent in the market
- Replace maturing ISBs with Govt. to Govt. loans until ISB/GDP ratio declines to 10% or less
- Take measures to improve Sovereign ratings
- Strengthen worker remittances through official channels
- Encourage forex transactions through formal channels with restoration of Money Changer licenses