Sri Lanka’s Central Bank Governor, Dr. Nandalal Weerasinghe, said today that the surge in Letters of Credit (LCs) earlier this year was driven by “pent-up demand” following the lifting of vehicle import restrictions in February, but demand is now stabilizing.
“Motor vehicle imports are stabilizing. They were slightly higher than expected at the start of the year due to pent-up demand, which led to a large number of LCs being opened in July, August, and September,” he told reporters in Colombo on January 26, 2026.
Dr. Weerasinghe noted that the number of LCs is now declining, and this trend is expected to continue over the next few months.
Addressing concerns about the impact of higher LCs on the Sri Lankan rupee, the Governor explained that exchange rates are determined by market demand and supply. While imports have increased, remittances, tourism, and exports are performing well, helping to balance foreign exchange flows.
“In the short term, if volatility occurs, the Central Bank intervenes to smoothen any disorderly adjustments,” he said. He added that the recent 5% depreciation of the rupee reflects normal market dynamics, supported by credit growth, private sector activity, and healthy economic growth.
Dr. Weerasinghe emphasized that higher import demand comes not only from motor vehicles but also from other sectors, indicating a broader trend in the economy.
CTOA Contributes to ‘Rebuild Sri Lanka’ Initiative
The Container Transport Owners’ Association (CTOA) has made a contribution to the ‘Rebuild Sri Lanka’ initiative using funds collected from its membership, reaffirming its commitment to supporting national recovery efforts.
“During this difficult period faced by our motherland, we as an association stand united with the nation and with all those affected by the disaster,” the CTOA said in a statement.
The funds were officially handed over to Secretary to the President Dr. Nandika Sanath Kumanayake and Minister of Ports Aruna Karunathilake by CTOA Chairman Sanath Manjula, Secretary Jayantha Karunadhipathi, and Consultant Dilip Perera, who represented the Association at the event.
LC Openings Decline as Vehicle Import Demand Eases – CBSL Chief
