Dec 30, 2021

State banks borrow dollars at 40% - 45%; Cabraal's happiness short-lived

State banks are now borrowing dollars at a hefty interest rate of 40% to 45%, says Colombo District Parliamentarian Dr. Harsha de Silva.

He also points out that the state-owned banks are at a huge risk as the central bank is foolishly controlling the value of the dollar.

Silva emphasized that Central Bank Governor Ajith Nivard Cabraal's claim that the official foreign exchange reserves have increased to $ 3.1 billion is a media circus to deceive the entire country.

He notes that a responsible institution such as the Central Bank of Sri Lanka has deliberately refrained from disclosing sources on how these reserves have increased.

He also accused the Central Bank of Sri Lanka and its governor of concealing the truth and creating a false picture at a time when the public image of the current government is deteriorating by the day.

 “We are facing a severe foreign exchange crisis. There are no dollars to import essential food items including gas, milk powder and medicines. Although experts advised the government to seek IMF assistance as a short-term approach to resolving this foreign exchange crisis, this government did not heed it. Now the Governor of the Central Bank is talking like a Superman. He claims that as promised, the foreign reserves have been increased. So then, all problems should be solved from tomorrow. Who are they cheating? This talk of reserves increasing is like the Kelaniya snake story. According to our sources, the reserves have increased due to the 10 billion Yuan loan from China. These can be spent based only under certain limitations.”

Dr. Harsha de Silva pointed out that the country has sunk into this abyss due to politicians hiding the truth for a long time and satisfying the people for political purposes.

By covering up the real foreign exchange crisis and presenting media shows in this manner, the country is heading further into the abyss.

 “This government does not have a long term vision. They are just working to get through day by day. They are trying all sorts of gimmicks to get some money from somewhere and show a boost in foreign reserves for a short period of time. This is like the band playing while the ship is sinking. The 3.1 billion dollars is not sufficient for anything. This happiness will last for a few days and we will fall back into the old pathetic state. Therefore, we need to look for a proper solution in resolving this crisis and getting back on track as a country. There is absolutely no point in all these media circuses.”

Dr. Harsha de Silva further stated that the Central Bank is currently dragging the dollars in the local market using new rules and regulations.