Hiru  News

Sri Lanka Human Rights Centre Executive Director Rajith Keerthi Thennakoon states that the Central Bank of Sri Lanka has intervened to control the rapid rise in the value of the US dollar within the domestic foreign exchange market by taking steps to impose an unofficial capped price for the dollar.

Issuing a statement, he claims that to prevent the continuous depreciation of the rupee, the Central Bank Governor has summoned chiefs of commercial banks and owners of authorised money exchange entities to hold two rounds of informal discussions.

The statement notes that instructions were given during these meetings to maintain the value of the dollar within a range between Rs. 329 and Rs. 335, and that an unofficial controlled price of Rs. 330 has been imposed for the dollar in interbank transactions, thereby violating International Monetary Fund (IMF) provisions.

Furthermore, it points out that steps have also been taken to restrict the 90-day period previously granted to importers to bring funds into the country down to 30 days.

He highlights that because the Central Bank has been creating rupees (technically printing money) to purchase dollars from commercial banks, the Broad Money Supply ($M2b$) has expanded drastically, increasing by Rs. 2,146.1 billion (Rs. 2.1 trillion) over the past 15 months.

The statement notes that during the first three months of 2026 alone (January – March), the Central Bank has created Rs. 610.7 billion, with that figure standing at Rs. 309.4 billion in the month of March alone.

He points out that new currency notes bearing the signature of President Anura Kumara Dissanayake have now been added to the market in large volumes, and the currency in circulation, which stood at Rs. 1,351,312 million on January 1, 2025, has risen by Rs. 303,956 million to reach Rs. 1,655,268 million by May 22, 2026.

He states that despite the money supply being increased by trillions, no significant growth has occurred in the country’s foreign reserves, as the foreign reserves, which stood at USD 6,531 million in March 2025, have only grown marginally to USD 6,759 million by the end of April 2026.

He also points out through the statement that the USD 700 million sum expected to be received from the IMF in the coming days can only be used to bridge the budget deficit (for Treasury operations) and cannot be utilized to strengthen reserves.

Meanwhile, the statement issued by Sri Lanka Human Rights Centre Executive Director Rajith Keerthi Thennakoon further notes that the central government’s outstanding debt has also risen by Rs. 1,754.47 billion, from Rs. 28,240.22 billion in November 2024 to Rs. 29,994.69 billion by the end of 2025.