Sri Lanka’s apparel exporters are urging the central bank to abolish a mandatory conversion rule for export proceeds as the rupee strengthens with a deflationary monetary policy. The appeal comes amid the removal of restrictions on shifting dollar proceeds between banks, initially imposed during forex shortages under inflationary policies. The Joint Apparel Exporters Association commended the central bank’s decision to lift these restrictions, emphasizing the critical role of fair trade policies in sustaining profitability and facilitating trade with global markets.
Exporters have navigated through turbulent times, adapting to challenges by embracing lean manufacturing, diversifying offerings, and exploring new markets. However, they stress the urgent need to end mandatory currency conversions to ensure a level playing field and enable sustainable growth. The government’s deflationary operations have led to a balance of payments surplus, prompting calls for policies that support the competitiveness of export industries in the face of an appreciating currency.
The apparel sector, a significant contributor to export revenue, has demonstrated resilience despite external shocks and geopolitical uncertainties. While the rupee’s appreciation promises short-term benefits like cheaper imports, exporters warn of the long-term repercussions on export competitiveness. The removal of mandatory conversion policies is seen as essential to safeguarding the sustainability of export industries, fostering economic recovery, and preserving employment opportunities in Sri Lanka.