ECONOMYNEXT – Sri Lankans have spent 286 million US dollars on personal and commercial vehicles in September 2025, taking the total in the nine months to 1,204 million US dollars the central bank said.
In September 227.5 million US dollars were spent on personal vehicles and 58.7 million dollars on commercial vehicles.
Vehicle imports have brought big revenues for the government.
After printing money under flexible inflation targeting, which then leads to external trouble, Sri Lanka usually restricts vehicle imports hitting government revenues in what analysts call a ‘cascading policy error’.
In 2018 vehicle imports were restructure through LC margins after cutting rates, but in 2020 many imports including vehicles were banned after cutting rates, depriving government revenues and prompting more money printing to enforce the rate cuts.
In September total imports topped 2,048 billion US dollars, with intermediate goods rising 13.4 percent from a year earlier to 1,179 billion dollars including fuel, indicative of a pick up in economic activity needing inputs.
Investment goods grew 6.8 percent to 346 million US dollars, with some machinery and equipment imports falling to 189 million dollars from 227 million dollars even as commercial vehicles picked up to 57.8 million dollars from 4.1 million last year.
Up to September investment goods imports (including commercial vehicles of 271 million US dollars) grew 19.4 percent to 2,934 million US dollars.
The central bank bought 177.3 million US dollars from forex markets in September.
The central bank has operated largely deflationary policy except for buy-sell swaps, but the Sri Lanka rupee has depreciated in 2025 amid dollar purchases by the central bank and high levels of excess liquidity which turn into credit and imports.
Injecting money through buy sell swaps and not defending the currency against the liquidity when banks lend the money to import cars, can also lead to currency deprecation. (Colombo/Nov01/2025)
Continue Reading
