The Central Bank of Sri Lanka has advised the government to consider increasing fuel prices and electricity tariffs immediately to reflect the cost.

In its latest monetary policy review, the Economic Research Department of the Central Bank noted that concerted efforts will need to be urgently taken to complement the efforts taken by the Central Bank to overcome the present economic challenges.

It also suggested introducing measures to discourage non-essential and non-urgent imports urgently based on the previous recommendation made by the Central Bank.

Further, the Central Bank proposed the government to take into account incentivising foreign remittances and investments further; implementing energy conservation measures, while accelerating the move towards renewable energy; increasing government revenue through suitable tax increases on a sustained basis; mobilising foreign financing and non-debt forex inflows on an urgent basis; monetising the non-strategic and underutilised assets; and postponing non-essential and non-urgent capital projects.

It said these measures would ensure that a coordinated approach is adopted to overcome the challenging economic circumstances faced by the country and to prudently exit the COVID-related policy accommodation.

The Central Bank said it would continue to closely monitor the emerging macroeconomic and financial market developments, both globally and domestically, and would stand ready to take further measures as appropriate, with the aim of achieving stability in the fronts of inflation, the external sector and the financial sector, thereby supporting real economic activity on a sustained basis.