Friday, December 9, 2022
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Private sector jointly expresses concern on currency shortage impact

Ten chambers of commerce and industry in a joint statement expressed serious concern over the impact of the foreign currency shortage in the country.

The organisations are Ceylon Chamber of Commerce, Federation of Chambers of Commerce and Industry, Ceylon National Chamber of Industries, Chamber of Young Local Entrepreneurs, ICC Sri Lanka, National Chamber of Commerce, National Chamber of Exporters, Chamber of Construction Industry, Women Chamber of Industry and Commerce, and Sri Lanka Apparel.

“They draw the attention of the Government to the difficulties faced by our member companies and the broader private sector in obtaining foreign currency to finance much-needed imports due to the prevailing situation with regard to the lack of availability of foreign currency.

This will affect in maintaining the credibility of doing business with our suppliers and business associates with whom they transact in foreign currency,” the joint statement said.

“At present, entrepreneurs are facing difficulties in obtaining foreign currency to finance much-needed imports due to the prevailing situation with regard to the lack of availability of foreign currency.

These range from not being able to obtain letters of credit to the inability to clear goods that have already arrived in the port due to delays experienced in honouring letters of credit. Further, this impact is also felt by indirect exporters and firms providing support services for exports.

“The ten chambers are concerned that while the importers themselves will face immense financial costs in the form of demurrage and other logistics-related costs, it will also affect longstanding relationships built with suppliers resulting in a serious and irreversible loss of confidence.

Importers are also unable to secure orders due to the inability to agree on a firm payment schedule as required by suppliers.

This will seriously impede the availability of essential products especially during the upcoming festive period during which consumer demand is typically high for most products.

This can cause great hardship to the public at large and may result in a significant increase in the cost of living.”

The 10 chambers also warned that the banking system would face difficulties as a result of not being able to meet the needs of their longstanding customers and could eventually experience a serious loss of reputation if they were compelled to dishonour committed payments.

The Government will also experience a loss of revenue due to a drop in import duties at a time when increasing government revenue is of paramount importance, the statement added.

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