📈 Govt. to Review Fuel Relief After 3 Months; Vehicle Import Surcharge Cools Forex Demand

• Fuel Subsidy Review: Deputy Finance and Planning Minister Dr. Anil Jayantha Fernando announced that the Government will decide on extending the temporary Rs. 10 billion fuel relief package after its initial three-month period. The package was launched as a short-term response to the Middle East crisis, and an immediate extension is not yet required as global oil prices have since eased significantly. • Fiscal Strength: The Government assured that it possesses adequate cash buffers and will maintain strict fiscal discipline, standing ready to provide targeted interventions if economic conditions shift. • Vehicle Surcharge Impact: The recently imposed 50% surcharge on vehicle imports has successfully cooled speculative demand and eased pressure on national foreign exchange reserves. • Forex Demand Drop: While vehicle-related letters of credit (LCs) spiked to roughly US$ 88 million the day after the surcharge was introduced, daily forex requirements have since plummeted. The average daily requirement fell below US$ 4 million by June, reaching US$ 3.79 million per day as of June 12, successfully improving annual import expenditure projections.