Importers warn of price hikes if forex facility is not restored

Essential food item importers have urged the Government to reintroduce the banking system under which they were allowed to import goods on an assessed foreign currency value ensuring their losses were minimal due to the depreciation of the rupee against the US dollar.

They have warned that if it was not reintroduced, their import quantities would have to be reduced.

An Importers' Association spokesman said the system known as the Forward Exchange Booking Facility was scrapped more than three months ago. The withdrawal had affected trading and could have an adverse effect on local prices.

He said that under the system, commercial banks were able to give them an assessment of the fluctuation of the currency and thereby traders planned out their imports in a manner that they did not suffer losses.

However, in the absence of such a system, the traders were reluctant to take risks in imports.

Meanwhile, Trade Minister Bandula Gunawardena said that some of the issues concerning the importers would be discussed at the Cabinet meeting next week.

He said the importers had warned of price increases.