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Curb current account deficit: IMF to Sri Lanka

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Press Trust of India Colombo
Last Updated : Jan 24 2013 | 2:10 AM IST

"Imports have fluctuated to an unparalleled degree and from a macro economic perspective however useful imports are, they have to be financeable," said Koshy Mathai, IMF's resident representative in an address to a business gathering here.

In order to reduce the financing need, Mathai said the country should encourage a softer exchange rate regime and enhance exports.

As a petroleum importing country Sri Lanka must find ways to finance the increased prices of petroleum, he added.

Current account deficit occurs when a country's total imports of goods, services and transfers is greater than the country's total export of goods, services and transfers.

Having faced a widening trade deficit, Sri Lanka as part of reforms started devaluing its currency in November 2011.

The Sri Lankan rupee has depreciated by around 18 per cent since then.

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The government early this year introduced prohibitive imports tariff on motor car imports, a measure aimed at preserving foreign exchange reserves.

The central bank has forecast 7.2 per cent economic growth this year, after revising it down in March from an original 8 per cent. Growth last year was at a record 8.3 per cent.

  

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First Published: Dec 06 2012 | 10:05 PM IST

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