Will bring forex by reviving idled state resources: Cabraal

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State Minister of Money and Capital Market, and State Enterprise Reforms Ajith Nivaard Cabraal said the Government hopes to bring in foreign currency by utilising resources that have been left idle.

An assessment of the loss arising from the bond scam | Daily FT
Ajith Nivard Cabraal

“We will make maximum use of the Port City, the Hambantota Harbour, etc. which will help us stabilise the rupee and bring in foreign currency without falling into debt,” he said, adding that the Government has always managed to successfully pay all loans on time without any risk of late payments.

Addressing concerns raised with regard to printing money, the State Minister said that difficult actions need to be taken in order to bring the country back to a stable environment.

“We do not make idle decisions without consulting experts. We decided to print money because we saw a need for it. These doubts imposed by the opposition will only take place if we keep printing money without control, but the CBSL (Central Bank of Sri Lanka) has plenty of experts that we have consulted prior to making this decision. We are working on these solutions provided by them. Every country has to make this decision at some point, and we as a government have taken the necessary steps in order to provide a sustainable solution and to get back to a state of normalcy,” he said.

He also added that the current situation will stabilise in three to four months.

In the meantime, the State Minister noted that banks in Sri Lanka have also been informed to be conscious and not allow the rupee to depreciate further. “These shortfalls are temporary. Within the next few months, we are certain there will be an inflow of dollars,” he said.

However, earlier, Opposition legislature MP Kabir Hashim said in Parliament that Sri Lanka is treading on the path of John Law, an 18th-Century French Mercantilist who drove France to a monetary meltdown with an early central bank in implementing so-called Modern Monetary Theory, debauching the currency.

According to Hashim, law’s methods led to bankrupting France and that is the same path Sri Lanka is currently on. He said that the restrictions imposed on imported goods have contributed towards decreasing the trade deficit from $ 9.3 billion to $ 6 billion.

Meanwhile, addressing the media in a special press conference held at the Ministry of Finance, Cabraal said the Government has not imposed any new bans on imported goods, but the decision to restrict imports was taken in order to protect the rupee.

The State Minister urged both importers and exporters to act responsibly in order to bring the situation back to a manageable state.

“There is a certain understanding between the importers and exporters of this country and we have had discussions with both factions to act for the good of the country and not their self-interests. Importers must import only what is necessary right now and forego all non-essentials. Further, we have discussed with them and stated that they only import what is necessary for the immediate future and not for years in advance,” he said.

Similarly, Cabraal said that exporters were asked to funnel the foreign currency that they receive to the current circulation instead of holding on to them, adding that if done correctly and responsibly, the country will not have to take tougher measures.

He further noted that although the CBSL has made several proposals to limit the importation of non-essential goods, the Government is working towards providing better solutions and measures to manage the current situation.

“We live in unprecedented times. The current pandemic situation has affected the entire globe and not just Sri Lanka. Thus, it is imperative that we be mindful of this and act accordingly,” he added.

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