CB Dismisses Claims Of External Sector Crunch Amid Dwindling Reserves

Central Bank Governor Prof. W.D. Lakshman in a fairly detailed statement issued yesterday dismissed the repeated concerns raised by certain quarters of an imminent external sector crisis brewing in the country, often citing weaker external reserves, ahead of the upcoming foreign currency debt obligations.

• Governor Lakshman assuages concerns over disruptions to imports and debt serviceability

• Says no disruption to trade except for certain nonessential imports

• Assures timely settlement of foreign debt obligations

• Stresses conditions of foreign currency liquidity observed in domestic market now are temporary

Brushing aside the claims made to the effect of dissuading banks from facilitating imports, due to an assumed shortage of foreign currency liquidity in the domestic market, Prof. Lakshman said that no disruption to trade except for certain non-essential imports has been exercised and they are working closely with commercial banks for judicious management of imports and foreign reserves.

“….It must be noted that the government and Central Bank have ensured that trade is not unduly disrupted and intermediate and capital goods imports are given priority in the process of imports,” he said.