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Sri Lanka to give resident visas for apartment buyers, dollar depositors

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ECONOMYNEXT – Sri Lanka will give long term resident visas to foreigners who buy apartments or deposit over 100,000 US dollars in commercial banks, Information Minister Nalaka Godahewa said.

“The cabinet approved a proposal to issue long term resident visas for foreigners who buy apartments,” Minister Godahewa said.

“A lot of apartments are coming up and if there are no buyers there can be a crisis.”

Visas of between 5 and 10 years would be given based on three categories of 75,000, 150,000 200,000 dollars paid for apartments.

Foreigners who deposit 100,000 US dollars in a commercial bank recognized by the Central Bank of Sri Lanka will also get a 10-year resident visa.

Sri Lanka printed money for two years and gave housing loans at 7.00 percent under to create a so-called ‘development state cum production economy’ after also cutting taxes despite having a flexible exchange rate (soft-peg) blowing the balance of payments apart and driving the country to default.

A key fallout of inflating money supply is mal-investments which turn into excess capacity when interest rates normalize and consumption falls off.

The construction sector now has to be slowed to restore credibility in the soft peg which has collapsed from 203 to around 345 rupees to the US dollar.

The developmental state/production economy is a more extreme form of flexible inflation targeting/output gap targeting exercise followed from 2015 to 2019 which triggered two currency crises and led to a jump in sovereign bonds and dollar debt and Ceylon Petroleum Corporation. (Colombo/Apr26/2022)

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