Sri Lanka’s trade deficit had exceeded to US $ 1 billion in February 2018 for the 3^rd consecutive month, the recent Central Bank’s (CBSL) report on External sector performance said.

The report notes that a surge in gold imports was the primary driver behind the fastest increase in overall merchandise imports in nearly 3 1/2 years, resulting in a further widening of the trade deficit. The gold import rush had also outpaced the moderate growth in export earnings, recording the highest ever monthly gold imports in February 2018.

“Considering the possible illicit arbitrage of the tariff differential between India and Sri Lanka on gold imports, custom duty of 15 per cent was imposed on gold imports with effect from 18 April 2018. Gold imports therefore are expected to decline in the coming months” CBSL said in its review.