Sri Lanka has imposed a 100 per cent cash margin on letters of credit (L/Cs) opened for car imports.

The move is part of the authorities' efforts to deter imports and shore up the fast depreciating Sri Lankan rupee.

Stringent measures

The Central Bank of Sri Lanka imposed the 100 per cent cash margin on L/Cs on top of other measures already levied on car importers.

They already have to finance a 110 per cent import duty and a recently imposed excise duty.

Exceptions

Car importers say the combination of these measures makes even supposedly affordable vehicles appear too expensive to the Sri Lankan buyer.

The L/C cash margin applies to motor vehicles except buses, ambulances, lorries and trucks, according to a statement from the central bank.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.