Rohini Kaviratne, the Matale District leader of Samagi Jana Balawegaya (SJB), has criticized the government’s financial strategy, accusing it of excessive borrowing and “money molding” through what she described as a recognized mechanism. Kaviratne claims that the current administration is resorting to measures similar to those used during the Gotabhaya Rajapaksa era, which she believes could lead to economic instability.
She highlighted that the Central Bank of Sri Lanka recently injected Rs. 36.16 billion into the financial system through an overnight auction on October 25, 2024. Additionally, over the past week, another Rs. 70 billion was “molded” through term auctions. According to her, this practice equates to minting new money, which can aggravate inflation and undermine economic stability.
Kaviratne further pointed out that the excess liquidity in the banking system has risen significantly. As of October 25, 2024, Rs. 193.4 billion in excess liquidity was reported in the Central Bank’s standing facility, an increase of Rs. 55.4 billion from the previous month’s figure of Rs. 138 billion.
She also raised concerns about the government’s plans to issue treasury bills worth Rs. 145 billion (or Rs. 14,500 crores) on October 28, implying that the administration continues to rely heavily on loans to manage its finances. Kaviratne warned that the country is treading a dangerous economic path and called for tighter controls on money creation to maintain inflation and economic stability.
