To overcome currency crisis massive loans obtained by previous regime, main cause.
Prime Minister Ranil Wickremesinghe yesterday said that the government will have to slash imports by US$ 500 million to US$ 1 billion by imposing duties on some sectors because of current economic constraints due to strengthening of the US dollar.
He added that industrial production in the US has increased causing rapid development.
“The relief measures granted to US citizens by President Donald Trump had enabled them to purchase more goods and increased the profits of US companies.
“Interest rates in the United States have been increased lately. This has encouraged the investors to pump more funds into that county,” the Prime Minister said.
The Prime Minister added that those who invested in the Sri Lankan Stock Exchange had also pulled out US$ 400 million.
“It is obvious that any businessman will invest in markets where the returns are high”, he said
The Prime Minister was speaking at the opening of D.S.Senanayake housing project in Hambantota yesterday. He asked former President Mahinda Rajapaska who was also Finance Minister as to why the rupee had depreciated against dollar from Rs.113.90 to Rs.132.55 within four months when there was no global economic crisis as such.
Prime Minister Wickremesinghe said the depreciation of the rupee against the dollar had been caused due to the previous government’s short sighted policy of securing commercial loans running into billions at higher interest rates. Premier Wickremesinghe added that the prices of petroleum products are soaring in the global market due to US sanctions on Oil imports from Iran and Russia adding that Sri Lanka is concerned on two simultaneous issues-the depreciation of the rupee against the dollar and soaring prices of petroleum products in the global market.
“This has affected other countries, the Euro, Malaysian Ringgit, Philippines Peso, Indian Rupee and our rupee had gone down in value. Some countries have increased their interest rates.
He said that our importers have to spend more dollars to purchase goods from foreign countries and our exporters won’t bring money to the country at this moment and woould wait till the right time comes to make more profits.