As Sri Lanka's economic crisis plunged into an ever deepening precipice, outlandish and illogical decisions made by the government over the recent weeks has led to the country losing a whopping 100 billion rupees in foreign reserves during the last seven weeks alone.
According to Lead Economist at LIRNEasia, Dr. Harsha De Silva, the government is facing a huge foreign exchange crisis, due to the serious drain on external reserves which has dropped from 3.4 billion US dollars to 2.4 billion US dollars in just seven weeks.
"We have lost more than 25 percent in reserves amounting to a billion dollars, which amounts to 100 billion Sri Lankan rupees" De Silva disclosed.
Citing reasons for the growing financial predicament, the senior economist pointed out that those who invested in the hedge funds, in government bonds, treasury bills are now going back.
"And the government in its mistaken notion that holding the rupee at 107 was the prudent thing to do, sold hundreds of millions of foreign reserves that were held by the Central Bank to try and hold the rupee" he claimed.
"Even though the big talking Central Bank Governor, Ajith Cabraal said all necessary measures has been taken and Sri Lankan has completely being excluded from the fallout of the global meltdown, I'm sorry to say he has been proved absolutely wrong. With crashing tea, rubber prices and the falling demand for our exports around the world and the massive outflow of capital by hedge funds and other foreigner who invested in Sri Lanka dollar bonds and treasury bills which Cabraal himself opened last year and this year, are now going back," he said.
Thus, he pointed out, the government which is now in a terrible fix, is trying to stop the outflow of foreign exchange by imposing ridiculously large taxes on imports even on items such as sarongs and sarees which are worn by low and middle class Sri Lankans.
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According to Lead Economist at LIRNEasia, Dr. Harsha De Silva, the government is facing a huge foreign exchange crisis, due to the serious drain on external reserves which has dropped from 3.4 billion US dollars to 2.4 billion US dollars in just seven weeks.
"We have lost more than 25 percent in reserves amounting to a billion dollars, which amounts to 100 billion Sri Lankan rupees" De Silva disclosed.
Citing reasons for the growing financial predicament, the senior economist pointed out that those who invested in the hedge funds, in government bonds, treasury bills are now going back.
"And the government in its mistaken notion that holding the rupee at 107 was the prudent thing to do, sold hundreds of millions of foreign reserves that were held by the Central Bank to try and hold the rupee" he claimed.
"Even though the big talking Central Bank Governor, Ajith Cabraal said all necessary measures has been taken and Sri Lankan has completely being excluded from the fallout of the global meltdown, I'm sorry to say he has been proved absolutely wrong. With crashing tea, rubber prices and the falling demand for our exports around the world and the massive outflow of capital by hedge funds and other foreigner who invested in Sri Lanka dollar bonds and treasury bills which Cabraal himself opened last year and this year, are now going back," he said.
Thus, he pointed out, the government which is now in a terrible fix, is trying to stop the outflow of foreign exchange by imposing ridiculously large taxes on imports even on items such as sarongs and sarees which are worn by low and middle class Sri Lankans.
le
oh.. MY BAD they are all millionaires already!!!
