Responding to an article published in Daily FT on September 28, Sri Lanka’s Joint Apparel Association Forum (JAAF) said the accusation of hoarding foreign currency against them is baseless as it accounted for almost 40 per cent of the total exports and 52 per cent of merchandize exports in addition to 6 per cent of the national GDP. In an article titled ‘Exporters hoarding $ 2.76 b in earnings overseas: CB’, the Central Bank of Sri Lanka accused exporters of hoarding foreign currency export earnings. JAAF refuted all allegations and recommended legal action against companies that did not comply with the directives of full repatriation and conversion of 25 per cent.

JAAF also disputed the rationale advanced in the article in justification of enforced conversion of foreign currency earnings to rupees. It further noted controls of repatriation and conversion of foreign currency earnings were only implemented in the past year. In the same time, the national economy contracted by 3.6 per cent and the rupee fell by 7.5 per cent against the dollar. Between November 2019 and the present day, Sri Lanka’s reserves fell from $ 7.5 billion down to $ 2.8 billion. As such, the current foreign exchange crisis taking place in the country cannot possibly be attributed primarily to the practices of exporters broadly.

Moreover, international banks are increasingly wary of discounting Letters of Credit to Sri Lankan banks, resulting in already stretched supply chains facing even further difficulties. The Sri Lankan Apparel industry has never backed away from its responsibilities in ensuring operational continuity and continuous flow of foreign exchange earnings into the country, it added.