He said that their trading partner in India, Mahindra and Mahindra, who has a motor assembling plant with Ideal Group had already agreed and was keen on this which will certainly ease the demand for the US dollar. He said that since Sri Lanka is maintaining close ties with India and having an FTA, swaps, and credit lines this should be pursued as annually Sri Lanka spends around USD 2 billion for Indian imports.
India was Sri Lanka’s highest contributor for tourism and if Sri Lanka can accept Indian rupees to be traded in Sri Lanka with a price control by the Central Bank (Eg. SLR. 2.50 for INR) more Indian tourists will start visiting Sri Lanka when the COVID-19 pandemic relaxes.
“If you go to Chennai and even the Maldives one could pay in Sri Lanka rupees but vice versa is not happening.”
He said that former President J. R. Jayewardene had a positive vision for the future and initiated the SAARC in 1985 to have a common currency and minimize intra-regional taxes and a single visa among other productive objectives.
“Today even Myanmar is keen to join SAARC which will create a huge region similar to the EU and intra-regional trade opportunities would be enormous. Though the EU region started after the SAARC, SAARC has not taken off like the EU. It’s sad that the SAARC Chamber of Commerce also set up in 1985 in not taking up this proposal for a common currency.”
“The SAARC business visa is a success as I could travel to any SAARC country with one Visa and at least now the SAARC region should come up with using the common currency, Rupee as done by the EU.”
The international status and usage of the euro have grown since its launch in 1999 formally replacing 12 currencies on January 1, 2002. Its international usage has also grown as a trading currency, acting as an economic or political alternative to using the United States dollar. Its increasing usage in this sense has led to its becoming the only significant challenger to the US dollar as the world’s main reserve currency. Way back in 2013 Iran agreed to take payments for oil it sells to India entirely in rupees after US and Western sanctions blocked all other payment routes. India is Iran’s second-largest oil buyer. “Hence paying India in Indian rupees is not a major change in the world order.”
He said next Sri Lanka should look at this option with Pakistan and Bangladesh as well and then in other SAARC counters.