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Govt. has to stop money printing now, not in 2024: Harsha

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ECONOMYNEXT –Sri Lanka should stop money printing earlier than indicated in a statement by Prime Minister Ranil Wickremesinghe, opposition legislator Harsha de Silva said, though legislators have already given extensive powers to the agency engage in liquidity injections.

“Prime Minister Ranil Wickremesinghe talked about money printing,” de Silva told parliament.

“He said, the inflation is going up and the printing should be stopped. But he also said it can only be stopped by the end of 2023 or in early 2024,” Silva said.

“It cannot happen like that and you have to take a decision right now. We all must understand that if nothing is being done, the inflation will go up until 100 percent from the predicted 60 percent.”

Silva the country has already become an unlivable place for the general public and according to the CBSL data, the food inflation of the country has risen up to 80.1 percent in June, 2022.

Sri Lanka’s central bank has now created the worst currency crisis in its 72-year history.

Sri Lanka’s intermediate regime central bank was set up as a fundamentally flawed Latin America style agency with dual anchor conflicts in 1950 by US money doctor, giving soft-peggers the ability to trigger currency crises and high inflation abolishing a currency board where money printing was outlawed up to then.

However the agency had no active open market operations in the initial stages and it was restrained by a gold peg.

A reserve collecting peg collapses when the central bank prints money to keep rates down. Sri Lanka’s central bank repeatedly prints money whenever domestic credit picks up, regardless of whether state or private credit is picking up including when the US hikes rates under pseudo monetary policy independence, with devastating consequences on the people, critics have said.

However after 2015 with flexible inflation targeting the rupee was hit with extreme open market operations, to target an output gap (printing money to push growth up) creating currency crises and pushing growth down in their wake and impoverishing the people with rupee depreciation.

Under ‘flexible’ inflation targeting a reserve collecting peg was repeatedly bombarded with liquidity injections to manipulate rates down (call money rate targeting) until the currency collapsed.

The currency was depreciated under real effective exchange rate targeting including in 2017 when there was not credit pressure and the rupee was facing upward pressure and large volumes of inflows were sterilized, as growth and private credit slowed.

There is nothing politicians in Sri Lanka can do, whether in power or in opposition when Sri Lanka’s central bank decides to print money to drive interest rates down.

“I don’t know whether you can take that decision now because Nandalal Weerasinghe has been appointed as the CBSL governor,” de Silva told Prime Minister Wickremesinghe perhaps in a reference to central bank independence.

In 2018 as credit recovered, de Silva pleaded with the then leadership with of the central bank in vain to allow rates to go up as the currency was hit with liquidity injections, after giving ‘central bank independence’, to the agency during the ousted ‘Yahapalana’ administration.

Fiscal dominance including de facto fiscal dominance was removed by the Finance Minister Mangala Samaraweera raising taxes, bringing the deficit down and market pricing fuel in 2019.

The central bank printed money anyway ignoring political pleas and busted the currency from 152 to 182 and drove away foreign investors in rupee bond by undermining the credibility of the peg.

However politicians have the legislative power to tame soft-pegging central bank into either hard pegs or true currency boards like Hong Kong, or currency board like pegs like in East Asia and GCC countries with restricted open market operations.

They can also curb flexible pegs with true inflation targeting and a clean floating exchange rate which will also eliminate balance of payments crises and poverty.

Over the past 7 years three currency crises were created in rapid succession under flexible inflation targeting and output gap targeting.

In the 2020-22 crisis, where over 2.6 trillion rupees were printed the rupee has now fallen from 200 to 360 to the US dollar with soft-peggers impoverishing both wage earners and the elderly.

In the 2020-2022 crisis, the banking system was pumped with excess liquidity of up to 200 billion rupees under modern monetary theory up from around 60 billion rupees under call money rate targeting and output gap targeting, which is a milder version of MMT.The entire world is now suffering from liquidity injections made by the Federal Reserve under its dual mandate which is being conveniently blamed on Russia and Ukraine.



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US sinks Iranian warship off Galle returning from Indian naval exercise

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IRIS Dena (F75)

Of 180 member crew, 30 rescued by Sri Lanka Navy

Iran warship IRIS Dena (F75), returning home after participating in the Indian International Fleet Review, and MILAN 2026 international naval exercises, has been sunk off Sri Lanka. The US, Russia and Iran were among 74 participants.

Speculation is rife that the US attacked the vessel in international waters as part of the continuing offensive action under Operation Epic Fury, launched on 28 February. Before the attack in the Indian ocean, President Trump declared that the Iranian Navy Headquarters and nine Navy vessels had been destroyed.

The ill-fated Moudge-class frigate participated in the Indian exercises with the US Navy’s Arleigh Burke-class guided-missile destroyer USS Pinckney (DDG-91) and the Marshal Shaposhnikov, a Udaloy-class frigate of the Russian Navy. Sri Lanka also participated in the exercises. SLNS Sagara and Israeli built Fast Missile Vessel Nandimithra represented Sri Lanka. Forty two warships and submarines and 29 aircraft had been involved.

At the time of the attack, the domestically built vessel was crewed by 180 officers and men.

The US Embassy here did not respond to The Island media query whether the US sank IRIS Dena . The Island was unable to get in touch with Iranian Ambassador in Colombo Alireza Delkhosh though he earlier indicated his availability later in the day.

Minister of Foreign Affairs, Foreign Employment and Tourism, Vijitha Herath, told the Parliament yesterday that the Sri Lanka Navy and the Sri Lanka Air Force had acted in less than an hour of receiving the distressed signal at 5.08 am.

According to the Minister, the first naval craft was dispatched by 6 am, followed by a second vessel at 7 am, while Air Force units joined the mission, including the deployment of a surveillance aircraft to support search operations.

Approximately 180 personnel were believed to have been on board the stricken vessel. Of them, around 30 were reported to be in critical condition.

“To save the lives of those 30 persons, we intervened immediately,” Minister Herath said, adding that the rescued crew members were being transported to Karapitiya Hospital for urgent medical treatment. Some had already arrived by the time of his statement.

SLPP MP Namal Rajapaksa asked whether the Iranian ship had been attacked within Sri Lanka’s Exclusive Economic Zone (EEZ).

Responding to questions raised by Opposition MPs, including NDF Badulla District MP Chamara Sampath Dassanayake, who alleged that the Iranian vessel may have been struck in Sri Lankan waters, the Minister said the ship had been outside Sri Lanka’s maritime boundary when it issued the distress call.

MP Dassanayake queried whether the frigate had been hit as part of the ongoing military escalation involving the United States and Israel against Iran. There was no immediate confirmation from the government regarding the cause of the emergency.

Minister Herath stressed that Sri Lanka’s intervention was guided solely by humanitarian considerations and international obligations.

“We are bound by the International Convention on Maritime Search and Rescue (SAR) of 1979, which we have signed,” he told Parliament.

Under the convention, a signatory state is required to respond to maritime emergencies, regardless of nationality, the cause of the incident, or whether it occurs beyond its own territorial waters.

“According to this convention, if a vessel, or its crew, encounters danger beyond our territorial limits, we are obligated to intervene and protect those lives on humanitarian grounds,” Minister Herath said, adding Sri Lanka had acted immediately to prevent loss of life and had taken all urgent and necessary measures as a responsible state.

The Minister noted that the incident highlighted broader regional security vulnerabilities in maritime safety amid escalating tensions in the region. “A regional military situation would also have an impact on our country. The government’s position is that a negotiated solution must be pursued,” he said.

He also disclosed that President Anura Kumara Dissanayake had held a telephone discussion on Tuesday night with the leadership of the United Arab Emirates regarding the evolving regional situation.

Rescue operations were continuing at the time of going to press.

By Saman Indrajith and Shamindra Ferdinando

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Justice Kumudini complains of male domination at senior levels, absence of a woman head of BASL

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Supreme Court Justice Kumudini Wickramasinghe

Judge of the Supreme Court Justice Kumudini Wickramasinghe has recently presented a stark analysis of the legal profession’s gender disparity, noting that in spite of women entering the legal field in substantial numbers, their representation dwindles at senior levels. She has highlighted critical statistics and the fact that only two women currently serve in the Supreme Court, none in the Court of Appeal, and that there has never been a woman President of the Bar Association of Sri Lanka (BASL).

“Inclusive leadership is not satisfied by entry-level participation,” Justice Wickramasinghe said. “It concerns who occupies the apex of institutional authority, who shapes doctrine, who speaks for the profession. These figures are not merely statistics; they are indicators of work yet unfinished.”

Justice Wickramasinghe said so at a seminar organised on the eve of International Women’s Day by the Bar Association of Sri Lanka (BASL), in collaboration with the Sri Lanka Women Lawyers’ Association (SLWLA). She underscored the need to address the systemic barriers preventing women from reaching the apex of the legal profession. Justice Wickramasinghe addressed the gathering as the Chief Guest.

BASL President Rajeev Amarasuriya, in his address, framed inclusivity not as charity or tokenism, but as “structural fairness.” He raised an important question being ‘who bears the responsibility of inclusivity’ and addressed the vital role of leadership in inclusivity. Furthermore, Amarasuriya challenged the profession to address the “gap between what we see coming into the profession and what we see at the top,” and clarified that such disparity did not stem from a lack of competence or commitment but from deep rooted practices and structural issues.

A dynamic panel discussion, moderated by Attorney-at-Law Tanushka Gunawardane, explored the multifaceted nature of inclusive leadership. The panel featured Justice Wickramasinghe, Constitutional Council Member Professor Wasantha Seneviratne (joining online), Senior Instructing Attorney Shiranthi Gunawardhana, and corporate leader Yanina Weerasinghe.

Professor Wasantha Seneviratne distinguished between mere representation and true participation, stating that inclusion becomes meaningful only when women have the “agency and authority to make decisions.” She emphasised that inclusive leadership is both a moral obligation and a pragmatic governance strategy.

Senior Instructing Attorney Shiranthi Gunawardhana shared personal anecdotes from her 50-year career, urging senior lawyers to act as mentors rather than gatekeepers. She stressed the importance of creating space for young female lawyers by offering flexibility and support to help them balance professional and personal responsibilities.

Yanina Weerasinghe, Head of Legal at Brandix, argued that true inclusion is measured by influence, not optics. “Diversity is being present; inclusivity is being influential,” she explained, warning against tokenism and calling for “cerebral opportunities” where women are selected, based on talent, and given a genuine voice in decision-making.

Justice Wickramasinghe addressed the relationship between judicial hierarchy and inclusion, asserting that authority and accessibility can coexist. “A judge can be firm in decisions while remaining approachable,” she said, adding that power exercised with transparency and humility strengthens, rather than weakens, institutional legitimacy.

The seminar also heard from Dilani Yatawaka, Managing Director/CEO of Ideal Motors, who shared her perspective as a female leader in the male-dominated automotive sector. She reinforced the critical role of supportive superiors and societal encouragement to enable women to ascend the career ladder while managing family responsibilities.

BASL Women Lawyers’ Professional and Career Development Committee Chair Indika Nagaratne Koththagoda in her welcome address said that the distinguished gathering was honoured to have Her Ladyship Justice Kumudini Wickramasinghe, Judge of the Supreme Court of Sri Lanka, as the Chief Guest and a key panellist and also welcomed the other panellists Attorneys-at-Law Professor Wasantha Seneviratne, Ms. Shiranthi Gunawardena and Yanina Weerasinghe for agreeing to share their insights on the subject during the ensuing panel discussion to be moderated by Attorney-at-Law Ms. Tanushka Gunawardane.

In her closing remarks, Nalani Manatunga, Co-Chairperson of the BASL Women Lawyers’ Professional and Career Development Committee, challenged the audience to reflect on the true meaning of leadership. “A position gives authority, but leadership gives direction,” she said. “Inclusive leadership is not about occupying space; it’s about creating space. Let our leadership not be measured by the chairs we occupy, but by the doors we leave open.”

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No qualified printer to head Government Printing Department

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A crisis was prevailing at the Government Printing Department due to the absence of a permanent Government Printer, Parliament was told yesterday, raising concerns over confidentiality, quality control and national security.

NDF MP Ravi Karunanayake demanded to know what steps the government had taken to fill the long-standing vacancy at the department, describing the situation as a serious administrative lapse.

“The Government Printing Department is a very important and closed service category institution. However, it has been functioning without a permanent Government Printer for some time,” Karunanayake said.

The MP pointed out that the department handles highly sensitive material, including documents related to defence and national security, as well as other classified publications.

“The non-availability of a permanent Government Printer affects the quality, confidentiality and sustainability of the work there. Has the Government conducted an audit on the possible issues arising from this situation? What immediate action has been taken to resolve this crisis?” he asked.

Responding on behalf of the Government, Prime Minister Dr Harini Amarasuriya said the vacancy had been filled on a temporary basis following a Cabinet decision.

She said an experienced officer from the Sri Lanka Administrative Service had been appointed on contract as Acting Government Printer to ensure operational continuity and maintain security standards in relation to sensitive printing tasks.

The Prime Minister acknowledged that the issue reflected broader systemic weaknesses in public service recruitment and professional development that had persisted for years.

“To bridge these gaps, the Government is initiating specialised training programmes and offering international scholarships for high-performing students to build future technical capacity,” she said.

Chief Government Whip and Health and Mass Media Minister Dr Nalinda Jayatissa said that under existing service minutes, more than two decades of experience were required for an officer to qualify for the top post, and that there were currently no internal candidates eligible for appointment.

He said that the department was facing a leadership crisis and administrative instability due to the lack of a permanent, qualified Government Printer.

By Saman Indrajith

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