ECONOMYNEXT – Greater than 9,400 letters of credit score (LCs) had been opened to import new private autos on the primary day as a consequence of hypothesis regardless of Sri Lanka’s 50 p.c surcharge on Customs Import Obligation (CID) turning into efficient, Deputy Finance Minister Anil Jayantha mentioned.
The federal government imposed a brief 50 p.c surcharge on Customs Import Obligation on new private autos for 3 months efficient from Could 16, aiming to limit imports and cut back the depreciation of the rupee forex.
Deputy Minister Jayantha mentioned regardless of the brand new surcharge, the had been 9,429 LCs opened on Could 18, the primary weekday when the brand new 50 p.c surcharge was efficient.
His feedback come amid opposition claims that two firms have gotten insider info and ordered 4,000 autos by opening LCs on Could 15 earlier than the federal government’s announcement on the following day.
“That is completely mistaken. There have been just one,782 letters of credit score opened on that day,” Minister Jayantha advised reporters at a media briefing in Colombo on Friday (22).
“This can be a deliberate transfer to confuse the general public and enhance the autos costs artificially.”
“If the data had been leaked, how can the LCs opened below the brand new car taxes will go to 9,429 on Could 18?” he questioned stating that the variety of LCs needs to be drastically low if the market has behaved rationally.
“That is primarily as a result of behaviour of the car importer and never due to info leak. That is purely as a consequence of hypothesis.”
Some analysts have identified the Central Financial institution’s failure to boost the financial coverage charges and mop up extra liquidity resulted from its greenback buy from the market as the principle purpose for the upper autos imports at decrease borrowing price.
Following years of strict, crisis-induced bans on motorcar imports since 2020, Sri Lanka’s tentative rest of those boundaries in early 2026 triggered a large, destabilizing surge in import expenditure that pressured emergency state intervention.
In response to an surprising US$ 2 billion spike in import prices over a two-month window, compounded by hovering international oil costs and extreme maritime logistical delays stemming from the intensified armed battle within the Center East, the federal government imposed the short-term 50 p.c surcharge on the present 30 p.c Customs Import Obligation for autos.
This target-hardening measure applies a 50% levy on each basic and preferential obligation bases throughout public transport autos, passenger motor automobiles, station wagons, vans, and totally electrical or hybrid fashions for a three-month interval (excluding two-wheelers and three-wheelers), leading to a internet worth inflation of roughly 15% for fast consumers.
The first coverage goal behind this focused fiscal shock is to explicitly defend the nation’s dwindling exterior reserves, which dropped from US$ 7 billion in March to US$ 6.76 billion by the top of April, by forcing non-essential automotive consumers to postpone purchases.
This was to artificially compress the demand for overseas alternate to halt the continual slide of the Sri Lankan rupee, which had quickly depreciated by over 6 p.c to greater than 350 per US Greenback by Could 21.
Sri Lanka opened LCs for 624,000 autos within the 16 months from January 1, 2025 to finish April 2026, Minister Jayantha mentioned.
The federal government has estimated that the nation must spend round US$200 million each month for car imports from the 50 p.c surcharge imposed final week. (Colombo/Could 22/2026)
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