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Decision to float rupee was not unilateral – Cabraal

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The decision to allow the Sri Lankan rupee to be flexible from 07 March, 2022, onwards, had been taken by the Monetary Board of the Central Bank, based on a Monetary Board Paper of the same date submitted by all three Deputy Governors, Director – Economic Research Department and Director – International Operations Department, said then Governor Ajith Nivard Cabraal, issuing a press statement yesterday.The three Deputy Governors are Mahinda Siriwardana, Dammika Nanayakkara and Y. Fernando.

Cabraal said that the decision to allow the rupee to be flexible is sometimes described by certain persons as being a “unilateral” decision he took. Therefore, he issued this statement to provide the factual position so as to set the record straight, Cabraal said.Given below is the statement in full: “The decision to allow flexibility in the exchange rate was taken by the Monetary Board of the Central Bank of Sri Lanka, based on a Monetary Board Paper, dated 7th March, 2022, submitted by all three Deputy Governors (Mr Mahinda Siriwardene, Mr Dammika Nanayakkara & Mrs Yvette Fernando), Director – Economic Research Department and Director – International Operations Department. The Board Paper stressed the need for changing the exchange rate policy, immediately, in order that the exchange rate acts as a “shock absorber” in the face of adverse developments in the global front on Sri Lanka’s already fragile Balance of Payments, including the increase of the crude oil price to nearly USD 140 per barrel and the worsening Russia-Ukraine war.

“Based on that Board Paper and the discussion at the meeting, the Monetary Board decided to “allow the market to have a greater flexibility in the exchange rate with immediate effect and communicate that the Central Bank is of the view that forex transactions would take place at levels which are not more than Rs. 230 per US dollar”. From the above it will be clear that, while the Monetary Board had expressed its “view” as to the level at which forex transactions would take place as a market guidance, a clear decision had been taken to allow for the flexibility of the LKR in the forex market. On the same day, a statement was issued to the media in line with the above decision.

Refer: https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/press/pr/press_20220307_policy_package_
to_support_greater_macroeconomic_stability_e.pdf

“Further, within about a week of floating the LKR, the President made a formal announcement that the government had initiated discussions with the International Monetary Fund (IMF) for a programme.

“Subsequently, Governor Cabraal resigned on 4th April 2022, on which day, the LKR was trading at Rs. 289.73/299.99 per USD in accordance with the new “flexible” exchange rate policy as announced by the Monetary Board. After Governor Cabraal’s exit, the Monetary Board, chaired by the new Governor Dr. Weerasinghe, continued with the “flexible” exchange rate policy, whist the Government and CBSL also took a series of far reaching decisions which included the decisions to: sharply increase policy interest rates by 700 bps from 8th April 2022 onwards, and to discontinue repayments of forex loans and interest from 12th April 2022 onwards. In the meantime, the LKR continued to depreciate to a range of Rs. 364.23/377.50 against the USD by 12th May 2022, at which point, the Monetary Board had apparently once again decided to “fix” the exchange rate at a new range between Rs.355.00/Rs.365.00 per USD. Such move to “fix” the exchange rate seems quite similar to the policy adopted by the Monetary Board chaired by Governor Professor W D Lakshman which “fixed” the LKR exchange rate at a range of Rs.199.00/203.00 per USD from 6th September 2021 onwards.

“It must of course be understood that there will always be conflicting opinions among stakeholders as to the value, timing and methodology to be followed in “fixing”, or “floating” or “pegging” a country’s currency. It is also quite possible that after decisions are taken to “float” or “fix” or “peg” the currency, others could, claim that the decision was right or wrong or implemented differently. However, it must be appreciated that the decision-making authority has to take its decision based on the prevailing circumstances, expert advice, practical ground conditions, judgement of future expectations and outcomes, etc. when viewed holistically. That is obviously why the Monetary Law Act provides the authority to the Monetary Board to change financial and monetary sector policies (including the exchange rate policy, interest rates, statutory reserve ratios, etc) when it deems appropriate to do so, from time to time.

It must also be appreciated that the implementation of policy measures is carried out by the professional and technical staff, of the Central Bank and they would naturally ensure that the policy measures being implemented are based on legal and binding decisions of the Monetary Board, which is the decision making authority, and not based on “unilateral” decisions of a single person.”



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Justice Minister hits back at CLA

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Harshana Nanayakkara

By Saman Indrajith

Justice Minister Harshana Nanayakkara yesterday told Parliament that the Commonwealth Lawyers’ Association (CLA) was not an organisation officially recognised or registered under the Commonwealth Secretariat, but a fee-levying private association.

Responding to a question by Opposition and SJB Leader Sajith Premadasa on why he had failed to meet CLA representatives, who recently visited Sri Lanka, Nanayakkara said he had offered them a date and time for a meeting, but they had been unable to attend.

The Commonwealth Lawyers Association (CLA) has questioned procedural fairness and other matters of concern in a report that deals with the Supreme Court hearing petitions against the 22nd Amendment to the Constitution. Among the issues raised by CLA President Steven Thiru, is the composition of the five-member bench.

The Minister said the CLA representatives subsequently requested another date, but he had already scheduled official engagements for the proposed day.

Nanayakkara said it was, therefore, incorrect to claim that he had refused to meet the CLA delegation.

“The CLA is not an official body accepted or admitted into the Commonwealth of countries. It is a private club whose members pay fees for membership,” he said.

However, the Minister said he was not suggesting that the organisation was “a bad organisation”, adding that the accuracy of several statements made by CLA members during their visit to Sri Lanka had yet to be established.

Nanayakkara identified lawyer Upul Jayasuriya as the CLA’s local representative and said Jayasuriya had sought a meeting with him.

“I gave him the opportunity, but he came up with the excuse that he could not make it as he was not in Colombo. Therefore, it is wrong to state that I did not give them time,” the Minister said.

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First visit by an Indian Defence Minister since IPKF deployment

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Deputy Minister Maj. Gen. Aruna Jayasekera receiving Indian Defence Minister Rajnath Singh on his arrival at the Bandaranaike International Airport (BIA) yesterday.

By Shamindra Ferdinando

Indian Defence Minister Rajnath Singh is in Colombo on a three-day official visit, the first by an Indian Defence Minister since the 1988 visit by K.C. Pant, during Rajiv Gandhi’s tenure as the Prime Minister.

The Indian Defence Ministry declared that the visit would further strengthen the traditionally strong and friendly bilateral relations in mutually beneficial areas, including a strong maritime and defence partnership.

The visit takes place in the wake of Sri Lanka and India signing seven MoUs, including one on defence, in April 2025. Communist Party General Secretary Dr. G. Weerasinghe told The Island that the government should set the record straight regarding the rapidly developing military relations with the US and India. The acquisition of Colombo Dockyard Ltd., by Indian Defence Ministry-run Mazagon Dock Shipbuilders Limited, soon after the finalisation of MoUs, underscored New Delhi’s strategy, Dr. Weerasinghe said. Responding to another query, Dr. Weerasinghe said that the government should take this opportunity to discuss the Tamil Nadu fishing fleet poaching on Sri Lankan waters.

Pant visited during the Indian Army operations against the Liberation Tigers of Tamil Eelam (LTTE) in the Northern and Eastern Provinces here, while Pranab Mukherjee visited Colombo, in August 2005, to pay last respects to assassinated Foreign Minister Lakshman Kadirgamar.

Indian and Sri Lanka governments said that the visit was meant to strengthen cooperation between the two neighbouring countries in the fields of defence, economic engagement, maritime affairs and regional security.

An Indian warship arrived at the Colombo harbour ahead of the Defence Minister’s visit, reminiscent of old gunboat diplomacy. INS Udayagiri’s visit coincided with the Defence Minister’s visit. The Defence Minister’s delegation included senior officials from Ministry of External Affairs.

During the visit, the Indian Defence Minister is scheduled to hold high-level discussions with President Anura Kumara Dissanayake who also holds the Defence portfolio, Prime Minister Dr. Harini Amarasuriya and Defence Secretary Sampath Thuyacontha. He is also expected to meet members of the Indian community, residing in Colombo.

Dr. Weerasinghe said that the NPP government conveniently extended the moratorium on foreign research vessels imposed during Ranil Wickremesinghe’s tenure in 2024. The CP official said that the media alleged that that decision was taken at the behest of the US and India but nearly two years after the last presidential election the ban remains.

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“I’m not a war criminal, I fought for my country”: Shavendra Silva

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Shavendra Silva

Former Army Commander and Chief of Defence Staff General Shavendra Silva has rejected allegations of wrongdoing during the final stages of war against the LTTE, declaring his readiness to answer specific accusations against him and questioning the basis on which he has been sanctioned internationally.

In an interview with India-based “Impact Stories,” retired General Silva said the Sri Lankan military had fought the Liberation Tigers of Tamil Eelam (LTTE) professionally and had sought to minimise civilian casualties during the final military offensive.

Silva, who commanded the Army’s 58 Division during the final phase of the war in 2009, said he had repeatedly sought an explanation for sanctions imposed on him.

“I have been sanctioned by the United States of America, and I was sanctioned recently by the United Kingdom. For what? I have been asking, tell me what I have done wrong,” Silva queried.

“I’m not a war criminal. I fought for my country,” he added, arguing that if he had violated military law, he should have been investigated and punished under the appropriate mechanisms.

The United States imposed travel restrictions on Silva and his immediate family in 2020, citing what it described as credible information of his involvement, through command responsibility, in alleged gross violations of human rights during the final phase of the war. The United Kingdom later imposed sanctions on Silva in 2025 over alleged human rights violations during the conflict.

Silva rejected allegations that the military deliberately targeted civilians, while acknowledging that civilian deaths could have occurred during the fighting.

“There would have been deaths of civilians, but those are not intentional,” he said, adding that military planning sought to minimise civilian casualties and that targets were avoided when civilians were observed nearby.

Recalling the final stages of the offensive, Silva said his division rescued more than 123,000 civilians and that more than 75% of, approximately 12,000 LTTE members, who surrendered at the end of the conflict, had surrendered to his division.

He said surrendered LTTE members were subsequently rehabilitated and reintegrated into society, arguing that this demonstrated the military’s approach toward those who laid down their weapons.

Silva also recalled an “encirclement operation” in which he said a large number of LTTE bodies were recovered. He said a senior LTTE northern commander was among those found dead and was dressed in civilian clothes while carrying a weapon.

“One could say a civilian was killed. No, he was the LTTE northern commander,” Silva said, arguing that combatants wearing civilian clothing could subsequently be counted as civilian casualties.

Silva also accused the LTTE of using civilians as human shields, preventing people from leaving areas under its control and positioning military assets near civilian locations during the final stages of the conflict.

He criticised successive Sri Lankan governments for what he described as a failure to effectively present the military’s account of the war internationally, saying this had allowed allegations against Sri Lankan troops to gain traction overseas.

Silva called on governments and international organisations making allegations against Sri Lankan forces to engage directly with those accused and present specific incidents for explanation.

“Come to a dialogue,” he said. “Tell us, ‘You all had done this on this particular day, at this particular time,’ so that we can clarify.”

“If we have done something, we will accept,” he added.

Silva also rejected claims that the LTTE represented the wider Tamil community, saying grievances should be addressed politically rather than through armed violence. He cited the LTTE’s assassinations, suicide attacks and forced recruitment while arguing that entire ethnic or religious communities should not be blamed for the actions of the organisation or its supporters.

The former Army Commander said the military’s objective had been to defeat the LTTE and free civilians from its control, while maintaining that Sri Lankan troops did not intentionally commit abuses against civilians.

Sri Lanka’s final military offensive remains the subject of longstanding international scrutiny. United Nations investigations and international human rights organisations have alleged serious violations of international humanitarian and human rights law by both government forces and the LTTE during the final stages of the conflict. Sri Lankan military leaders, including Silva, have repeatedly rejected allegations that government forces deliberately targeted civilians.

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