ECONOMYNEXT – Sri Lanka owes global shipping lines 70 million US dollars in delays as agents were unable to find the foreign exchange to remit the money, and has asked for port dues to be paid in rupees instead, a media report said.

Shipping lines may abandon Sri Lanka, halting imports and exports if arrears continue to accumulate, Sri Lanka’s Daily Mirror newspaper quoted a representative of the Ceylon Association of Shipping Agents as saying.

The CASA had requested Shipping Minister Nimal Siripala de Silva to allow shipping agents to pay port charges in rupees as a solution, the report said.

From June 01 Sri Lanka Ports Authority had required all payments to be made in US dollars, the report said, in gradual payment dollarization, as the country faced persistent forex shortages.

The CASA had said that shipping agents get payments from customers in rupees.

These include payments such as LCL (small shipments less than a container load) charges, change of status, reefer electricity charges, and payments for break-bulk cargo, casual callers, and tanker vessels, the report said.

Minister de Silva had promised to talk to the central bank and come up with a solution.

Sri Lanka’s central bank has printed large volumes of money since early 2020 triggering the worst currency crisis in its 72-year history.

The intermediate regime central bank operates a soft peg which collapses whenever money is printed to keep interest rates artificially low when deficits go up or domestic private credit strengthens. (Colombo/June02/2022)