Despite the rupee depreciation having a toll on the import sector, experts say that the export sector and tourism industries are expected to see a surge in the immediate future.
Sri Lanka allowed the rupee to float early last month which resulted in the depreciation of the currency hitting an all-time low of Rs. 141.
Importers claimed that the depreciation had made an impact. Prices of vehicles and other consumer goods had already recorded increase following the currency depreciation.
However, an industry expert speaking to The Nation Gain stated that the apparel sector would see an increase in revenue of two billion rupees on average per month owing to the depreciation.
The apparel industry has been the highest export revenue generator for Sri Lanka over the years, and had earned a revenue of US$ 424.3 million in June 2015, and US$ 2,405.4 during the first six months of the year. “This is assuming that the goods are sold at the same price,” the expert pointed out.
Chief Financial Officer, Brandix Lanka Limited, Hasitha Premaratne told The Nation Gain that the apparel sector would see a positive growth in terms of revenue in the immediate future. However, he pointed out that Sri Lanka did not have a competitive edge in terms of apparel exports, since all exporters faced the same challenges and were provided with the same opportunities.
“The currency issue has also affected our competitors such as India, Bangladesh and Pakistan. Therefore, Sri Lanka does not have a competitive edge in terms of exports since all these countries have the same facilities,” he stated.
Meanwhile, tourism industry experts stated that the depreciation would result in an increase in rupees coming to Sri Lanka.
“Tourists would get more rupees when they convert their dollars therefore, the money we get would increase in the short term,” President, Tourist Hotels Association of Sri Lanka (THASL), Hiran Cooray told The Nation Gain.
However, he pointed out that it would not be the case in the long run when prices of goods increase. “Prices of food and other goods could increase in the future which would mean that our situation would more or less be the same,” he added.
However, the fisheries industry of Sri Lanka has been burdened further due to the depreciation coupled with the ban it faces in the European Union (EU) market.
While continuing to be on the lookout for new markets, Sri Lanka currently imports fish from Maldives and re-exports them to the EU after processing. “Therefore, the depreciation of the rupee has, in fact, hit us further,” President Seafood Exporters Association of Sri Lanka, Roshan Fernando said.