Sri Lankan customers owe shipping companies $70m: report

ECONOMYNEXT – Sri Lanka owes global shipping companies $70 million in delays as agents couldn’t find the currency to hand over the money, and demanded port dues be paid in rupees instead, says a media report.

Shipping companies could abandon Sri Lanka, halting imports and exports if backlogs continue to pile up, the Sri Lankan newspaper Daily Mirror quoted a representative from the Ceylon Shipping Agents Association as saying.

CASA had asked Transport Minister Nimal Siripala de Silva to allow shipping agents to pay port charges in rupees as a solution, according to the report.

Since June 1, the Sri Lanka Ports Authority had required all payments to be made in US dollars, according to the report, as part of a gradual dollarization of payments, as the country faced continued currency shortages.

CASA had said that shipping agents received payments from customers in rupees.

These include payments such as LCL (small shipments less than one container) charges, change of status, refrigeration electricity charges, and payments for general cargo, occasional callers and tankers, according to The report.

Minister de Silva had promised to talk to the central bank and find a solution.

Sri Lanka’s central bank has printed large volumes of money since the start of 2020, triggering the worst currency crisis in its 72-year history.

The middle regime central bank enforces a soft peg that collapses each time money is printed to keep interest rates artificially low when deficits rise or domestic private credit strengthens. (Colombo/02/06/2022)