Central Bank warns public over money printing claims as debate grows on rupee depreciation, excess liquidity, imports, and inflation.
Money printing claims have triggered a strong response from Sri Lanka’s Central Bank, which urged the public not to be misled by statements made by parties it says lack the technical knowledge to analyze such matters.
The Central Bank’s warning follows allegations that its failure to mop up rupee liquidity in order to keep interest rates low had increased import demand and contributed to the recent sharp depreciation of the rupee.
“Money printing, money supply, and the determination of exchange rates are matters that must be analyzed with specialized technical knowledge,” the Central Bank said in a social media post.
“Do not be misled by the misleading public statements being made these days by parties who do not possess such technical knowledge,” it added.
The statement comes ahead of a monetary policy meeting, the third of six scheduled for 2026, amid speculation that the Central Bank is under pressure to tighten policy to reduce pressure on the currency.
Concerns have also grown over rising inflation, mainly cost-push inflation following a fuel price hike.
Rajith Keerthi Thennakoon, a former provincial governor and executive director of the less known Centre for Human Rights and Research, has claimed that money printing in Sri Lanka exceeded Rs. 2.1 trillion over the past 15 months.
In a separate statement, he also said currency in circulation had increased by Rs. 303,956 million during the last 17 months alone.
Some analysts argue that the Central Bank failed to mop up excess liquidity created when it bought US dollars to build foreign currency reserves.
As a result, they claim lending institutions have been able to lend at cheaper rates, increasing imports through lower borrowing costs and placing additional demand on dollars.
