29 minutes ago
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Ranil Wickramasinghe
At a time when the Sri Lankan economic crisis is in full swing, the Sri Lankan government is taking steps to print more money.
Accordingly, Prime Minister Ranil Wickremesinghe has told the Reuters news agency that there is a need to print another one lakh crore rupees.
” We don’t even have a rupee income. We are printing more than one lakh crore rupees, ”said Ranil Wickremesinghe.
In this context, he says, the country’s inflation is likely to reach 40 percent in the coming months.
He notes that this will put more pressure on people who have been struggling with inflation.
Inflation, which stood at 21.5 per cent in March, rose to 33.8 per cent in April, according to a report released by the Department of Census and Statistics on Monday.
As fuel prices, including petrol and diesel, have risen, so have the prices of essential services and the prices of essential commodities.
In such a situation, the new Finance Minister and Prime Minister Ranil Wickremesinghe is taking steps to print another one lakh crore rupees.
Meanwhile, Ranil Wickremesinghe says that steps are being taken to submit the new interim budget within the next 6 months.
He expressed hope that the new interim budget would set aside funds for the two-year relief plan, rather than developing the country’s infrastructure plans.
Ranil’s warning
Image source, central bank of sri lanka
Only the Central Bank has the power to print money in Sri Lanka.
” Money printing will definitely cause inflation if it is spent on consumption without paving the way for production. Now inflation has come down to almost 30 percent. Inflation only arises if money is printed and used for consumption in a way that simply increases demand, rather than for production activities, for example, to pay the salaries of government employees.
If it is used for production activities, it is a different matter. When comparing government revenue and expenditure, the gap between monthly revenue and expenditure has increased from $ 50 billion previously to $ 700 billion now. Therefore, the government has no choice but to print money, “economics professor Gopalapillai Amirthalingam told BBC Tamil.
Prime Minister Ranil Wickremesinghe recently told the BBC Sinhala Service on Tuesday that government employees would not be paid if the money was not printed.
World Bank refuses to provide new loans
The World Bank has announced that it has no plans to provide new credit assistance to Sri Lanka until a draft economic policy is implemented.
The World Bank also said it was concerned about the people of Sri Lanka.
The World Bank says it is working with the International Monetary Fund and other development agencies to provide advice on appropriate policies to restore economic stability and broader growth.
It states that Sri Lanka needs to prepare a proper policy framework for economic stability.
The World Bank says it will re-examine some of the financial plans that Sri Lanka is currently pursuing and take steps to provide much-needed relief assistance to Sri Lankans, farmers living below the poverty line, farmers and small entrepreneurs.
The BBC Tamil Anushka Wijesinghe was asked about the World Bank’s announcement.
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He says there is no need to be surprised about this announcement by the World Bank.
“The announcement by the World Bank is not surprising. No wonder the way it is reported in the news. There is an economic crisis in Sri Lanka. The World Bank and the International Monetary Fund are investigating the crisis. According to these studies, Sri Lanka is ineligible to provide new funding. They have already said that new financial assistance will not be available until the economic situation returns to normal, “said economist Anushka Wijesinghe.
He also commented on the discussions between Sri Lanka and the International Monetary Fund.
“Sri Lanka and the International Monetary Fund are currently in discussions. Discussions are currently underway at the official level on what kind of agreement and what kind of economic package can be designed. Following the conclusion of these official level discussions, it will be ascertained what economic package will be available between Sri Lanka and the International Monetary Fund.
The agreement must go to the Executive Board of the International Monetary Fund and be approved. Approval must be obtained from the Sri Lankan Cabinet on behalf of Sri Lanka. Only after these two steps are completed can we confirm that this agreement will be ratified, ”said Anushka Wijesinghe.
Image source, Getty Images
He says only after the two sides confirm the agreement will other financial aid companies have the opportunity to help Sri Lanka.
Until these activities are completed, the companies will not be able to go for new loans and new projects.
It will be observed what kind of policy draft has been prepared in accordance with the agreement of the International Monetary Fund.
By the World Bank Already Get approved money
The World Bank has decided to release the unspent funds from the old schemes already announced by the World Bank for Sri Lanka and use them for urgent needs.
“Even if new loan schemes are not provided, there are alternative ways for the World Bank to help Sri Lanka. They have confirmed those plans. The World Bank has now decided to divert the remaining funds spent by the World Bank to Sri Lanka on existing and approved projects, from already approved projects and to provide those funds for the country’s urgent need, ”said economist Anushka Wijesinghe.
He said the funds allocated for each type of project, including development projects, irrigation projects and housing projects, would now be diverted by the World Bank to meet the urgent need.
He says the World Bank has not said it will not provide assistance to Sri Lanka.
However, economist Anushka Wijesinghe said the World Bank would not extend new lending until the agreement with the International Monetary Fund was finalized and confirmed.
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