CB says no ban on imports except for gold and vehicles

• But importers face nightmare situation due to shortage of dollars
• Economists call for realistic exchange rate to engage in trading activities freely

The government has neither banned nor imposed controls on imports except for vehicles and gold, as some have commented at various occasions and thus anybody can import anything without an issue, according to the Central Bank. 

“People can import whatever they want but we have to import the ones that everyone needs,” said Central Bank Governor Ajith Nivard Cabraal, making clarity on the recent decision to bring the licensed banks also to bear part of the import bills of 
essential goods.

Sri Lanka had to impose import controls on certain goods since March 2020, predominantly to preserve foreign currency and the number of goods added to the list stretched over time as part of the government’s policy on import substitution, which proved to be a complete flop.

What really happened was the cronies, who got protection from foreign competition, got fat at the expense of the hapless consumer, who is now paying higher prices even for the staples. 
Turmeric and rice are classic cases in point, as people are now paying more than double the price for a kilo of rice than before the pandemic two years ago.

“Actually, we have not placed any restrictions other than for vehicles and items like the tiles for which the restrictions were placed for other reasons and gold. The rest of it is all allowed,” Cabraal said. 

Despite there are no import controls except for a handful of items, importing has become a nightmare, as traders find it extremely difficult to open letters of credit with their banks, due to the prevailing dollar shortage. 

As seen from the interim reports filed by most of the companies engage in trading, they cited the foreign exchange shortage next to the cost of inflation as the biggest issue facing them in carrying out their business operations. 
Sri Lanka has to either float its currency or raise interest rates or do both to ensure that it can trade freely with the world without undermining the economic prosperity of its people, as happened through its post-independence history.  

Lack of competition and economic freedoms have kept the people of Sri Lanka in poverty and they would continue to remain impoverished unless economic freedom and competition are not ensured.