Central Bank mulls lifting vehicle import ban as experts raise concern on proposed system

COLOMBO (News 1st); The Central Bank of Sri Lanka is looking at a proposal to allow people who can bring foreign exchange from abroad, to import vehicles and pay taxes in dollars.

Sri Lanka banned vehicle imports since March 2020 to manage its already weak foreign-currency reserves.

The higher prices have supported loan recoveries from repossession in the near term, but may expose FLCs to unexpected sharp price corrections.

This has caused surging demand for second-hand vehicles, inflating prices by around 50% depending on vehicle type.

Governor of the Central Bank Ajith Nivaard Cabraal recently said there is a bubble being created when it comes to this vehicle importation issue.

"That can cause some sort of danger to our economy in the future. Therefore I believe, if we can import vehicles using foreign currency and create a system to pay the taxes in the importation process using foreign exchange, we will get foreign exchange to the country and on the other hand we will get the vehicles to the country as well," he said.