Sri Lanka: Finance and Mass Media Minister Mangala Samaraweera who was optimistic that the rupee would bounce back yesterday said the rupee depreciation was not the ‘catastrophe it was made out to be’.
He assured that the rupee which is following the current volatilities of the international market, would stabilize once the markets settle.
“The repayment of the loans the Rajapaksas left behind however is a bigger issue than the depreciation. The economy could collapse if we do not repay the loans this year and the next. So our efforts are concentrated on this,” the Minister said.
Addressing a media briefing at the Finance and Mass Media Ministry, Minister Samaraweera said that he had written to the Head of the Intergovernmental Group of 24 on Monetary Affairs and Development (G24) yesterday, proposing that all countries facing a similar issue with their currencies meet at a summit to discuss the future course of action.
“We want to form a coalition of the willing. This is something that is not going to go away in a month or two. Volatility in the international scene will be around for awhile, and we have to look at ways to face them,” the Minister said.
International events such as the trade war between China and the US in addition to sanctions on Iran have exacerbated the issues, he observed, “We have no control of these issues”.
The rupee yesterday depreciated to Rs 174.12 against the US dollar but the Finance Minister pointed out that during the previous regime, the rupee depreciated 14 percent during an even shorter time period. The government at the time had unsuccessfully pumped in USD 4.1 billion to stabilize it, “Given the need to protect our foreign reserves, I am not prepared to spend our reserves unnecessarily”, said Minister Samaraweera.
“The Government has also imposed import restrictions on non-essential items to curb imports, the Finance Minister stressed, adding that these measures were temporary, “We are not going back to an era of import controls. They will not be there longer than necessary. I would also like to add that the liberalisation programme of the government would go ahead,” the Minister said.
“We have done the best we can do at the moment,” he added.