Dump rupee, install currency board, top US economist tells SL
Posted on March 25th, 2022
Courtesy Ceylon Today
A top US economist has recommended the dumping of the rupee and installing a currency board as the only way to save Sri Lanka’s economy.
Steve H. Hanke of the John Hopkins University notes the country had such an entity from 1884 to 1950.
He tweeted, Today, I measure inflation in Sri Lanka at a roaring 49%/yr. Sri Lanka’s currency crisis and recent fuel price hikes are sinking LKA……”
Since January 1st 2022, the Sri Lankan rupee has depreciated ~26% against the USD. Sri Lanka’s severe balance of payments crisis and recent fuel price hikes are sinking LKA……”
……To ease the crisis, LKA needs to install a currency board, like the one it had from 1884 until 1950,” he added.