The Hon. Mujibur Rahuman

¶ 01 Hon. Deputy Chairperson of Committees, last night the Government decided to bring this regulation: exporters must convert dollars brought into the country into rupees within 30 days. Why this sudden move? Earlier, exporters were given 90 days to convert. That 90-day period has suddenly been cut to 30 days. Today we were to take up a proposal on Telecom towers; that was halted and, suddenly, this was brought instead.

¶ 02 On 13 May, the President wrote to the IMF indicating the removal of the 90-day limit—to further liberalize and give more relief to exporters. Barely three weeks later, the President reverses course, capping it at 30 days. Why? Because there is a crisis—specifically, a dollar shortage. To bridge that shortage, they have cut it to 30 days, hoping exporters’ dollars will flow into the market.

¶ 03 In recent weeks the dollar rose sharply. When it hit Rs. 350, the Central Bank raised policy rates—yet the rupee did not strengthen. Even after receiving USD 695 million from the IMF, the rupee did not strengthen. Now the Government is attempting a forced conversion by cutting from 90 to 30 days. But can compulsion achieve this?

¶ 04 As Hon. Harsha de Silva noted, the Government has shifted from “normal mode” to “crisis mode.” If there is no crisis, dollars should be available in the market. Instead, the Central Bank has unofficially instructed commercial banks to open TTs only for essential imports, deprioritizing others—some banks already practice this. This shows a crisis trajectory. We warned earlier that market confidence has broken; without restoring confidence, trying to micromanage via ad hoc rules will push us into a worse place.

¶ 05 Two weeks ago we warned; today the dollar is back around Rs. 337. When you took office, it was around Rs. 290. Reserves may be up, but there is a domestic dollar scarcity; inflation is rising. It’s like a household with savings in the father’s account while the children go hungry—reserves exist but the market lacks dollars; prices rise. Both savings and liquidity are needed. Without restoring confidence, more controls will worsen things.

¶ 06 There is another issue: fruit and vegetable exporters—about 30 key exporters—who for decades brought nearly USD 1 billion annually by exporting to the Middle East. Since the Middle East war that began on 28 February, exports have collapsed. Many of their containers are stuck at the port, being returned due to the war. One exporter now faces Rs. 1.6 million in demurrage per returned container, with containers held over 50 days. Officials have not expedited clearance. Exporters have written to the President, Ministers, and the Export Development Board. Regrettably, no one has intervened. The Government has failed to provide relief to these primary dollar-earning exporters. There are around 10,000 workers in this chain—farmers and ancillary suppliers included. This chain has broken. I urge immediate consultation with them and provision of relief. Sloganeering like Gotabaya Rajapaksa, Basil Rajapaksa, and Ajith Nivard Cabraal did will not fix the economy—work will.

¶ 07 Finally, domestic industries: especially those importing fabric for local production. Previously, there was a CESS of Rs. 100 per kilo on fabric. From 1 April this year, the CESS was removed and VAT of 18% was imposed. This has endangered the industry by increasing costs; they cannot compete in the market, and about 30,000 workers and importers now face severe distress. Please address this urgently. I conclude.

¶ 08 Thank you.