Sri Lanka’s central financial institution on Sunday additional tightened controls on the outflow of overseas forex to fight a rising money crunch triggered by the coronavirus pandemic.
International trade reserves have nearly halved since late 2019 to $4 billion after the rupee sank to a file low final yr.
The financial system has been badly hit by the unfold of the virus and lockdowns in its worst downturn since independence from Britain in 1948.
The Central Financial institution of Sri Lanka mentioned abroad investments by native corporations could be suspended for six months.
The quantity of capital that firms and residents can take out of the island nation would even be restricted, it added.
Sri Lanka has already banned imports of luxurious items and vehicles since final yr to fight the overseas forex outflows.
The federal government is planning to increase the import ban to cell phones, computer systems and digital shopper items, native media reported just lately.
The central financial institution mentioned in a press release that the restrictions had been to “help and keep the monetary system stability”.
Worldwide ranking businesses have expressed concern over Sri Lanka’s skill to service its large overseas debt.
However central financial institution governor W.D. Lakshman has mentioned the nation will meet its debt obligations, which quantity to $3.6 billion within the subsequent six months.
Colombo has additionally borrowed from a number of Asian nations, together with Bangladesh, China and South Korea, and expects to obtain $800 million from the Worldwide Financial Fund in August.
The nation’s debt has ballooned over the previous twenty years after the financing of a number of infrastructure tasks that critics say have turn into white elephants.