Sri Lanka gets tough on exporters to counter depreciation effects

COLOMBO, Nov 24 (Xinhua): Sri Lanka is to target an ambitious 13 per cent export growth to counteract negative depreciation effects after its currency was devalued by 3 per cent on an order from the president, the central bank said here Thursday. During his Budget 2012 speech to parliament last Monday, President Mahinda Rajapaksa ordered a 3-per cent devaluation of the rupee. Central Bank Governor Ajith Nivard Cabraal told a packed post-budget seminar that exports have increased 20.8 per cent in 2011 on top of 16 per cent growth being recorded in 2010. This is the largest increase in 20 years, he emphasised. However, due to the depreciation, public debt will increase by 74 billion rupee (about 8.2 million US dollars) and Sri Lanka's oil bill by 11 billion rupee (about 1.2 million USdollars) in 2012, he remarked, insisting that other sections of the economy are paying for the depreciation. "It is fair now to ask exporters to deliver. People must ask exporters to increase their exports by 33 per cent and hit the 14 billion US dollar mark. Tourism should earn 1.5 billion US dollars and remittances 6 billion US dollars in 2012," he said. Sri Lanka's 2010 tourism earnings stood at 500 million US dollars and remittances at 4 billion US dollars, making the new targets tough to meet in the face of continuing economic issues in Europe and the Middle East where key migrant workers and tourists come from.