Lanka govt announces drastic measures to save falling rupee

Faced with the falling value of the rupee against the US dollar, the Sri Lankan government today announced drastic action to curb imports and lessen the pressure on the currency.

"The government in order to ease the pressure off the Sri Lankan rupee has decided to take measures temporarily effective from midnight tonight," a finance ministry statement said.

Accordingly the vehicle importation permits issued to parliamentarians will be suspended for an year. No imports of vehicles for government use will be allowed, a six-month suspension of duty free vehicle permits issued to privileged sectors, raising of import cash margins for vehicles other than buses, lorries and ambulances, and 100 per cent cash margins for import of luxury goods including mobile phones, are the other measures announced.

The Sri Lankan rupee has depreciated over 4 per cent this month while during the year so far the fall has been over 10 per cent.

The rupee has hit an all-time low of nearly 170 to the dollar from 153 at the beginning of the year.

The IMF on Friday projected the annual economic growth of Sri Lanka to be under 4 per cent in 2018.