The Prague Post - Used cars turn to gold as Sri Lanka economy skids on the edge

EUR -
AED 4.125796
AFN 78.893799
ALL 97.655972
AMD 437.241874
ANG 2.024498
AOA 1027.812388
ARS 1249.662756
AUD 1.753815
AWG 2.024734
AZN 1.913777
BAM 1.944276
BBD 2.265762
BDT 136.337387
BGN 1.956767
BHD 0.423431
BIF 3338.277399
BMD 1.123292
BND 1.455047
BOB 7.754145
BRL 6.361092
BSD 1.122194
BTN 96.014765
BWP 15.20562
BYN 3.671817
BYR 22016.52749
BZD 2.254051
CAD 1.563224
CDF 3229.464547
CHF 0.933652
CLF 0.02756
CLP 1057.591215
CNY 8.11618
CNH 8.138876
COP 4776.968655
CRC 570.342415
CUC 1.123292
CUP 29.767244
CVE 109.619673
CZK 24.959892
DJF 199.63126
DKK 7.461323
DOP 65.971627
DZD 148.993756
EGP 56.858872
ERN 16.849383
ETB 151.25457
FJD 2.55066
FKP 0.845613
GBP 0.848597
GEL 3.094675
GGP 0.845613
GHS 14.812404
GIP 0.845613
GMD 80.333634
GNF 9717.791708
GTQ 8.633253
GYD 234.790787
HKD 8.733906
HNL 29.152381
HRK 7.539314
HTG 146.832335
HUF 406.558212
IDR 18568.245037
ILS 4.012848
IMP 0.845613
INR 96.09394
IQD 1470.045892
IRR 47304.646456
ISK 146.690927
JEP 0.845613
JMD 178.09443
JOD 0.79675
JPY 163.377797
KES 145.039031
KGS 98.232021
KHR 4493.447231
KMF 486.955199
KPW 1011.156161
KRW 1571.480195
KWD 0.344622
KYD 0.935211
KZT 579.543408
LAK 24251.448487
LBP 100542.524545
LKR 335.751487
LRD 224.432768
LSL 20.418479
LTL 3.31679
LVL 0.679468
LYD 6.128919
MAD 10.366374
MDL 19.328354
MGA 5030.430817
MKD 61.524989
MMK 2358.627378
MNT 4016.099329
MOP 8.983554
MRU 44.480561
MUR 51.615148
MVR 17.309417
MWK 1945.974049
MXN 21.923367
MYR 4.845867
MZN 71.78032
NAD 20.418298
NGN 1807.94288
NIO 41.297252
NOK 11.720852
NPR 153.619544
NZD 1.904773
OMR 0.43245
PAB 1.122204
PEN 4.100398
PGK 4.656587
PHP 62.401113
PKR 315.819734
PLN 4.248882
PYG 8964.227911
QAR 4.090519
RON 5.118283
RSD 116.533969
RUB 92.672071
RWF 1605.874864
SAR 4.213453
SBD 9.380443
SCR 15.935549
SDG 674.539621
SEK 10.92291
SGD 1.458988
SHP 0.882731
SLE 25.532637
SLL 23554.857944
SOS 641.330221
SRD 40.727189
STD 23249.881013
SVC 9.819195
SYP 14607.933027
SZL 20.407046
THB 37.16303
TJS 11.58742
TMT 3.942756
TND 3.37016
TOP 2.630862
TRY 43.506293
TTD 7.622196
TWD 33.794808
TZS 3030.07848
UAH 46.632576
UGX 4109.842094
USD 1.123292
UYU 46.872395
UZS 14486.204385
VES 102.329916
VND 29183.131847
VUV 135.603049
WST 3.112186
XAF 652.103576
XAG 0.034568
XAU 0.000338
XCD 3.035753
XDR 0.807253
XOF 652.118005
XPF 119.331742
YER 274.633851
ZAR 20.475931
ZMK 10110.979694
ZMW 29.763986
ZWL 361.699636
  • JRI

    -0.0760

    12.95

    -0.59%

  • SCS

    0.5700

    10.48

    +5.44%

  • NGG

    -2.3900

    70.18

    -3.41%

  • CMSC

    -0.0500

    22.11

    -0.23%

  • BTI

    -1.1500

    43.3

    -2.66%

  • RIO

    -0.8400

    59.18

    -1.42%

  • GSK

    -0.3000

    36.87

    -0.81%

  • BCC

    2.4800

    89.58

    +2.77%

  • AZN

    -2.7700

    67.3

    -4.12%

  • BCE

    0.9800

    22.23

    +4.41%

  • RBGPF

    2.8600

    65.86

    +4.34%

  • RYCEF

    0.4300

    10.6

    +4.06%

  • VOD

    -0.1500

    9.25

    -1.62%

  • BP

    0.4600

    28.59

    +1.61%

  • CMSD

    -0.0800

    22.33

    -0.36%

  • RELX

    -0.8100

    54.06

    -1.5%

Used cars turn to gold as Sri Lanka economy skids on the edge
Used cars turn to gold as Sri Lanka economy skids on the edge

Used cars turn to gold as Sri Lanka economy skids on the edge

Supermarket shelves are bare and restaurants can't serve meals, but Sri Lanka's economic crisis is a bonanza for used car dealers, with vehicle shortages pushing prices higher than a house in a nice area.

Text size:

The island nation of 22 million is on the brink of bankruptcy, inflation is red hot and the government has barred a range of "non-essential" imports to save dollars needed to buy food, medicine and fuel.

In the car market, this two-year ban has kept factory-fresh automobiles off local roads, forcing desperate buyers to pay some of the world's highest prices for beaten-up compacts and no-frills family sedans.

Anthony Fernando spent a recent weekend coursing through sales lots in the Colombo outskirts on behalf of his daughter, who has tried to find an affordable set of wheels for nearly a year.

"She was thinking that prices will come down," the 63-year-old told AFP, but now she is "paying for procrastinating".

Prices have gone "beyond the reach of a common person", he said.

A five-year-old Toyota Land Cruiser was on offer online for an eye-watering 62.5 million rupees ($312,500) -- triple the pre-ban rate, and enough to buy a house in a middle-class Colombo neighbourhood or a new luxury apartment in the city centre.

A decade-old Fiat five-seater with a busted engine that might be stripped for parts elsewhere was listed at $8,250 -- more than twice Sri Lanka's average yearly income.

"A car and a house are symbols of success," said a grinning Sarath Yapa Bandara, the owner of one of the capital's biggest dealerships.

"That is why most people are willing to buy even at these high prices."

- 'Out of this world' -

Car ownership remains a virtual necessity in the traffic-snarled streets of Colombo, where a ramshackle bus and rail network was already struggling with overcrowding.

The number of taxis has also fallen sharply, with drivers selling their cabs to cash in on the dizzying prices, and those still working charging double their old fares or more.

"You must have your own car," said Udaya Hegoda Arachchi, another buyer preparing to bite the bullet at a dealership.

"We can't expect prices to come down anytime soon, given the economic situation in the country," he told AFP.

Covid has sent Sri Lanka into a tailspin, drying up all-important earnings from tourism and foreign remittances.

In March 2020 the government brought in a wide-ranging import ban -- including for new cars -- to stop foreign currency from leaving the country.

But the policy has not been able to staunch the outflow of dollars, and has instead left the nation struggling to source critical goods.

Food retailers have rationed rice, restaurants have shuttered because they cannot find cooking gas, and cash-strapped power utilities unable to afford oil have imposed rolling blackouts. Farmers have run out of fertiliser.

- Chinese debt -

Rating agencies have warned that Sri Lanka might default soon although the government says it will meet its commitments. It is trying to renegotiate its Chinese debts with Beijing.

The import ban has also left car parts in short supply, meaning drivers are at risk of being stranded after a breakdown.

Ravi Ekanayake told AFP that his Colombo repair garage was doing a roaring trade from owners unable to afford the astronomical costs of switching to a new vehicle.

"But parts are scarce. It is a catch-22: You either get caught with an old car without parts or you don't have the money to buy a new car."

Financial analyst Murtaza Jafferjee said the prices also underscored a problem caused by excessive money printing by a cash-strapped central bank, with "too much money chasing too few goods".

He said the prices were also increasing transport costs and adding to inflation, which hit a record 14 percent in December.

"When vehicles become unaffordable for a segment of society, their activities will be limited. Then we will also see a loss of economic output," the CEO of JB Securities said.

"We are about to collapse and not many people appreciate the depth of the problem."

T.Musil--TPP