Sri Lanka calls on exporters to repatriate profits quickly

COLOMBO, Sept.28 (Reuters) – Sri Lanka on Tuesday called on exporters to speed up repatriation of profits as foreign exchange crashes and authorities scramble to secure US dollars to free food containers from ports and finance imports.

The government announced at the end of August an emergency regulation authorizing the authorities to seize stocks of basic foodstuffs and sell them at guaranteed prices to cope with a food crisis.

Cabinet co-spokesperson Ramesh Pathirana acknowledged the crisis in the island nation and said the government has decided to release $ 53 million to urgently clean up some 800 food containers stuck in the port.

The government is also reportedly importing 100,000 tonnes of rice from Myanmar to make up for shortages, but this week did not approve price increases for powdered milk, gas, wheat flour and cement.

“The Minister of Finance has held several rounds of discussions with exporters. Some exporters are reluctant to repatriate their profits because they expect the dollar to appreciate further, ”Pathirana said in a weekly briefing.

“But we have asked that they quickly repatriate their winnings to help us and we expect them to comply.”

The central bank recently estimated that exporters failed to repatriate $ 2.7 billion in the first eight months and called the July / August gap “quite alarming.”

The monetary authority also defended regulations introduced in May to require exporters to repatriate 25% of income within a month and proposed new measures to increase rapid repatriation.

Exporters, however, argue that they need immediate access to dollar revenues to pay for raw materials and deal with escalating shipping costs. They also fear that any delay in accessing dollars due to a currency shortage could cause them to lose buyers.

“Sri Lankan exporters are already operating with very slim margins and we cannot absorb the costs of currency conversion on top of that,” Shiham Marikar, director general of the National Chamber of Exporters, told Reuters.

“If the government wants higher conversion and repatriation rates, then it needs to put in place a system that allows us to have quick access to dollars to pay suppliers and cover expenses.”

Even with the release of containers of sugar, spices, and lentils, consumers expect the shortages to continue until the government can raise enough dollars to import essential products as the market shifts. commodity prices rise in world markets. (Edited by Swati Bhat, Robert Birsel)

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