News
Decision to float rupee was not unilateral – Cabraal
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.”
News
Ex-lawmakers group calls for IPU’s intervention to check “irregularities” in Parliament
Association of Former Members of Parliament of Sri Lanka has requested the Inter-Parliamentary Union to inquire into, what the group calls, institutional irregularities in Parliament.
The Association cited the decision taken by the Attorney General not to appear for Speaker Dr. Jagath Wickremeratne, in a case filed in the Court of Appeal by sacked Deputy Secretary General of Parliament Chaminda Kularatne, to underscore the need for IPU’s intervention.
The following is the text of the letter signed by former JVP MP Premasiri Manage, on behalf of the Association: We write to Your Excellency on behalf of the Association of Former Members of Parliament of Sri Lanka, an independent body representing former legislators who have served the Parliament of Sri Lanka across successive administrations. The Association is committed to upholding democratic values, parliamentary traditions, institutional integrity, and the rule of law within Sri Lanka’s governance framework. It is with grave concern that we bring to your attention a series of developments that, in our respectful view, seriously undermine parliamentary democracy, administrative fairness, and institutional independence in Sri Lanka.
1. Unlawful Cancellation of Parliamentary Pensions
The present Government of Sri Lanka has, through actions that we consider both unlawful and unethical, cancelled the pension entitlements of former Members of Parliament. This decision appears to have been taken arbitrarily, without adherence to established legal principles, legitimate expectations, or due process, thereby undermining the dignity and security of those who have served in the national legislature.
2. Illegal and Malicious Interdiction of the Deputy Secretary General of Parliament
We wish to draw urgent attention to the interdiction of the Chief of Staff and Deputy Secretary General of Parliament, which raises serious concerns regarding abuse of authority and interference in administrative due process. According to material presently before the Court of Appeal of Sri Lanka (CA/Writ Application No. 109/2026), the interdiction:
• Was imposed through the Parliamentary Staff Advisory Committee (PSAC), which lacks lawful authority to exercise such disciplinary powers, rendering the action ultra vires;
• Was based on a preliminary inquiry conducted without proper legal mandate, thereby invalidating the process from its inception;
• Was not the result of an independent administrative determination, but was carried out following the direct personal intervention and influence of Speaker, Dr. Jagath Wickramaratne;
• Appears to have been driven by personal and retaliatory considerations, amounting to a malicious exercise of authority rather than a lawful disciplinary process.
Importantly, it is also noted that the Attorney General of Sri Lanka has withdrawn from appearing on behalf of the Hon. Speaker in the related proceedings, reportedly in view of serious procedural irregularities associated with the interdiction process. The Speaker has consequently retained private legal counsel. This development strongly indicates that serious legal and procedural defects exist in the interdiction process, further reinforcing concerns regarding its legality and propriety. It is therefore evident that the lawful disciplinary framework vested in the Secretary General of Parliament was bypassed, resulting in a serious violation of the principles of natural justice, institutional independence, and the rule of law.
3. Discrimination and Harassment within Parliamentary Administration
We are also deeply concerned by credible allegations of discrimination and harassment within the parliamentary administrative structure, which, in our respectful view, have arisen as a result of the interference of the present Speaker in the administrative affairs of Parliament, thereby undermining the independence of the parliamentary administration. These concerns include:
• Discriminatory conduct affecting senior officials, including the Deputy Secretary General;
• Harassment and discriminatory treatment of female staff members within Parliament;
• The resignation of one female officer due to such circumstances;
• Confirmed findings of harassment in respect of another female officer attached to the Information Technology Division, as established by a report submitted by a former High Court Judge.
These incidents indicate a disturbing pattern of administrative misconduct and a failure to ensure a safe, independent, and professional working environment within Parliament.
3. Broader Institutional Concerns
The above matters collectively raise serious concerns regarding:
• The erosion of the independence of parliamentary administration;
• Abuse of authority and concentration of power;
• Undermining of due process and established legal frameworks;
• A broader decline in adherence to democratic governance standards.
Request for Engagement
In light of the foregoing, we respectfully request that the Inter-Parliamentary Union:
1. Intervene and monitor the situation;
2. Call for reports and clarifications from the Speaker and senior parliamentary administration;
3. Facilitate independent review and observation of relevant judicial proceedings;
4. Promote accountability and restoration of institutional integrity within Parliament.
Given the IPU’s distinguished role in safeguarding parliamentary democracy and promoting good governance worldwide, we firmly believe that your timely engagement will contribute significantly to restoring institutional integrity and public confidence in Sri Lanka’s Parliament.
News
Power and Energy Minister, Ministry Secy resign over coal probe
Power and Energy Minister Kumara Jayakody and Ministry Secretary Prof. Udayanga Hemapala have resigned from their posts.According to the President’s Media Division (PMD), the two officials submitted their letters of resignation to President Anura Kumara Dissanayake this afternoon.
The resignations come in the wake of a Special Presidential Commission of Inquiry appointed to probe possible unlawful activity and financial irregularities in coal procurement and power generation.
The PMD said the decision was taken to ensure that the Commission’s work proceeds without interference or perceived influence from individuals holding office.
Minister Jayakody, in his resignation letter, noted that following the appointment of the Commission, he had requested that investigations into coal imports, since 2009, be referred to the Criminal Investigation Department (CID), describing it as part of the government’s anti-corruption mandate.
He added that the inquiry should be conducted independently and without bias, and said his continued presence in office could be perceived as an obstacle to the process.
Prof. Hemapala, in his resignation letter, said his decision was intended to facilitate the commencement of investigations and ensure a transparent and independent process, the PMD said.
The Special Presidential Commission was recently appointed to examine allegations of irregularities in coal imports and electricity generation over a prolonged period and to recommend corrective measures.
News
President appoints Commission to probe irregularities in coal imports from inception of Norochcholai
President Anura Kumara Dissanayake yesterday appointed a Presidential Commission of Inquiry to investigate alleged irregularities in coal imports and electricity generation, amid concerns over possible financial losses to the State.
The President’s Office said the Commission would examine transactions from the inception of coal-based power generation in Sri Lanka up to April 16, 2026, focusing on operations linked to the CEB-affiliated Lanka Coal Company (Pvt) Ltd., its successors, and private suppliers.
The three-member body is chaired by Supreme Court Justice Gihan Kulatunga, with Court of Appeal Justice Adithya Patabendige and High Court Judge Sanjeewa Somaratne as members. Former Ministry Secretary P.V. Bandulasena has been appointed Secretary to the Commission.
Appointed under the Special Presidential Commissions of Inquiry Act No. 07 of 1978, as amended, the Commission has been mandated to scrutinise procurement procedures, supply chains, quality testing, and operational processes connected to coal imports and utilisation.
The Commission has been tasked with the following mandates:
• To determine whether irregularities or illegal acts occurred in the procurement process for coal imports and to assess any resulting financial loss to the government.
• To investigate whether substandard coal was imported during the relevant period and to examine the entire associated workflow, including procurement, supply, quality testing, operational, and utility processes.
• To ascertain whether electricity generation using imported coal reached the expected levels of efficiency and productivity.
• To investigate whether legal or financial irregularities or illegal acts occurred during the power generation process if substandard coal was indeed utilized.
• To examine whether there were any breaches of expressed terms or conditions in these processes and, if so, whether measures such as withholding payments or other compensatory actions were taken.
• To identify the political authorities, government officials, officers of Lanka Coal Company (Pvt) Ltd, suppliers, or their agents responsible for any such incidents and to recommend future action to be taken against them.
• To propose measures to prevent the recurrence of such alleged malpractices or illegal acts in the future and to ensure proper governance and integrity.
In addition to the above, the Commission will also report on any other alleged malpractices or illegal acts related to coal importation and electricity generation, and recommend preventive measures to address such issues.
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