Importing vehicles under the guise of returning diaspora or Franco Valuta with extended letters of credit is prohibited, as a letter from Customs Commission Commissioner Debele Kebeta was sent out last week. The letter suggests that car importers have been exploiting the loopholes to bring vehicles into the country despite a restriction on their import imposed by the Ministry of Finance to contain the forex squeeze 10 months ago. The Ministry had prohibited the allotment of foreign exchange for an indefinite amount of time to a list of 38 items that included chocolate, cigarettes, carpets and vehicles. Despite the customs commission restricting the inflow of the stated items into the country, the new letter reads that vehicles are coming into the country at mass through gaps in implementation. While the initial decision by the Ministry of Finance was prompted amidst reports that the country had enough forex reserves to facilitate two weeks of imports, declining exports and a vast budget deficit have not resolved the issue quite yet. A decision last week by the central bank to decrease forex surrender requirements for exporters to 60pc has been indicated by certain economists as holding the promise of boosting exports next year.
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