Tuesday, July 23, 2024

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CB Chief Nivard Cabraal moots new measures to boost forex earnings

Central Bank Governor Ajith Nivard Cabraal has mooted new measures to boost foreign exchange earnings whilst saving scarce reserves and awaiting a positive response from the Government.

One key measure is higher duties to be imposed on about 700 items of imports which are considered non-essential.

“This will curtail demand for those imports and corresponding saving of forex as well as lead to higher revenue for the Government,” Cabraal said.adding that a new scheme of voluntary Flexi working hours and Work-from-home measures for offices is another.

“This will lead to substantial savings in energy consumption leading to savings in forex outlay for fuel for electricity generation and transport,” he added.

Previously Cabraal had suggested fuel-pump prices to be increased on the basis that such a move will ensure liquidity for the State banks, reduction of losses of CPC and general reduction of oil demand which will lead to lower forex outlay for fuel imports.

Cabraal also said solar and wind energy projects need to be fast-tracked as it will lead to lower imports of fuel in the generation of electricity while also leading to new foreign direct investments and employment.

CBSL Governor had also mooted import of vehicles to be allowed, where those are financed via inward remittances for that particular purpose, and where the import duty and other charges are also paid via new inward forex inflows.

“This will lead to substantial inflows of forex into the country, while also reducing the price of motor vehicles which has risen very sharply,” he added.

The CBSL Chief said the EPF scheme should be extended to attract new savings into the country via forex for which a special incentive is to be added upfront.

“This will make it attractive for expatriate workers to qualify for a pension and/or lump sum payment at time of retirement, while also leading to substantial non-debt creating forex inflows,” he explained.

It was also stressed that certain non-strategic and underutilised State assets be monetised. This will lead to greater economic activity as well as new non-debt forex inflows, Cabraal said, adding that these measures are in addition to many others recently introduced by the Central Bank to attract new forex inflows and retain the existing forex resources within the country.

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