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Sri Lanka exporters should convert, rupee worth 185 to dollar: Minister Cabraal

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by Imesh Ranasinghe

Sri Lanka’s rupee should be around 185 to the US dollar, State Minister for Money and Capital Markets Nivard Cabraal has said urging exporters to convert dollar inflows without holding them back.

“I think the rupee should be around 185 to the US dollar depending on the macroeconomic factors,” Minister Cabraal said at a conference last week.

Cabraal a former central bank Governor kept the rupee stable for several years, though after a fall in 2012, it was not allowed to appreciate when credit fell in 2013 and the central bank bought billions of dollars for its reserves, for reasons that are not clear.

Sri Lanka’s rupee fell sharply in over January 2021 after the central bank printed money and brought rupee interest rates below local dollar yields over the past year amid a credit downgrade which drove up dollar bond yields, making forward premiums negative and incentivizing importers to cover forward.

As exporters also unwilling to sell forward at a discount, banks bought dollars in the spot and near term market, using the printed money from the central which are sloshing around as excess liquidity to provide forward cover to importers, putting pressure on exchange rate.

Some exporters loaned dollars and were borrowing rupees due to the inverted interest rates.

Due to unprecedented levels of excess liquidity in the overnight market interest rates did not move up in a correction – which would have raised the forward premium – despite interventions by the central bank which reduced some excess liquidity.

Excess liquidity fell from 266 billion rupees at the beginning of the year to around 120 billion rupees amid dollar losses to interventions and debt repayments.

The central bank then closed the forward market, preventing banks from giving forward cover.

“So the central bank took necessary actions about that,” Cabraal said. “And because of those actions taken by the central bank in the past few days, we once again saw the rupee being appreciated.”

Minister Cabraal asked exporters to convert their dollars as soon they receive them, as they may face losses by listening to fear mongers.

“We should keep in mind that it is a tough period for the world, so in such a tough period when we are going forward we all should go forward together,” he said.

“It’s like going in a boat, when that boat is going in a rough sea we should not shake the boat, If one or two tries to shake the boat everyone in the boat will have to face the consequences.”

Cabraal said if some are shaking the boat in that manner will, they will have to take necessary steps in order to stop them from shaking and making the boat unstable,

“It is what the central bank has done now,” he said. “There are other things the central bank can do but our opinion is that it is not necessary to do them now.”

Analysts have blamed a so-called ‘flexible exchange rate’ where a pegged exchange rate is suddenly turned into a floating exchange rate as money printing puts pressure triggering panic and uncertainty forcing importers settle bills immediately taking more credit and exporters to watch and wait.

There have been calls for central bank reform to stop the instability.

The rupee has appreciated in recent days from around 196 to 191 to the US dollar.

Meanwhile Cabraal said in 2014, when Mahinda Rajapaksa administration had left office, the US dollar was 131.5 rupees to the dollar.

At the time the only accusations from the economic experts in the opposition at that time were that the Central Bank is controlling the rupee as it was stable for years and the rupee should be allowed to float.

“But after they came into power the rupee depreciated for 5 years like never before with an annual average depreciation of 6.7 percent,” he said.

There were no global crisis or any other problem during those five years but the rupee depreciated to 181.63 against the US dollar.

“The rupee only depreciated by 2.6 percent in 2020, it is a big achievement when considering the tough period we are going through, meanwhile, the central bank was able to collect 282 million dollar to buttress its reserves,” Cabraal.

Other analysts had also blamed the last administration for giving the central bank independence to target a real effective exchange rate on contested claims that the rupee was more ‘overvalued’ than East Asia while printing money.

The resulting currency crisis then created consumption shocks that lowered growth.

More money was then printed on the basis that there was an output gap, triggering another currency crisis and destroying the economic credential of the United National Party, which was the largest partner of the then ruling coalition.

Analysts had warned of the outcome earlier.

Analysts and economists are now warning that the current monetary framework involving so-called modern monetary theory, with high levels of excess liquidity would also have dangerous consequences as soon as economic activity picks up.

While tourism receipts fell, with no dollar income for tourist sector workers and hotel owners to spend, imports will fall by the same amount, unless money was printed, and credit picked up.

There have been steady losses in foreign reserves, mostly from the financial account despite weak credit lowering imports. (ECONOMYNEXT)



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Delegation from Korean Volunteer Association meet Secretary to the President

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A special delegation led by Deokuju Jung, President of the Korean Volunteer Association for Distinguished Service to the State, met Secretary to the President Dr Nandika Sanath Kumanayake at the Presidential Secretariat on Monday (12) afternoon .

The discussions focused extensively on welfare programmes the association expects to implement in Sri Lanka and the support it hopes to obtain from the Government of Sri Lanka for these initiatives.

Attention was also given to the proposed implementation of a comprehensive programme in collaboration with the Government to support children with special needs in Sri Lanka.

The meeting was also attended by Ven. Wanawasi Rahula Thero, Founder of Namal Uyana and Chief Incumbent of the Namal Uyana Forest Monastery, Senior Additional Secretary to the President Roshan Gamage and Korean Volunteer Association representatives Jungsun Choi, Junyoon Lim, Chaeeun Kim and Wonwook Choi.

[President’s Media Division]

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HRCSL issues recommendation on seizure of four books by B. Piratheepan by Sri Lanka Customs

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The Human Rights Commission of Sri Lanka (HRCSL) issued its recommendation in Case No: HRC/KIL/031/26 concerning the decision of the Director General, Sri Lanka Customs to seize
four books authored by B Piratheepan.

The books ‘Ippothum Inge Irandu Thesangalthaan’, ‘Elluttal Nan Yuttam Ceykiren’, ‘Bayangaravaathi’, and ‘Cyanide’ are Tamil language books printed in Chennai, India, and were imported to Sri Lanka. Sri Lanka Customs seized the books on 27 March 2026 and had informed the Complainant that they would only be released upon obtaining approval from the Ministry of Defence.

Following an opinion issued by the Arts Council of Sri Lanka and the State Literary Sub-Panel, two of the books, ‘Bayangaravaathi’ and ‘Cyanide’ were released on the basis that the experts on the Council had concluded that these books were works of fiction. Copies of the remaining two books ‘Ippothum Inge Irandu Thesangalthaan’ (75 copies) and ‘Elluttal Nan Yuttam Ceykiren’ (147 copies) were not released and remained under detention.

At the conclusion of its inquiry, the Commission noted that none of the Respondents wished to take direct responsibility for the continued seizure of the remaining two books. It observed that
the handling of the matter was marked by indecision and opacity at every stage.

Sri Lanka Customs purported to act under section 135, read with section 12 and Schedule B of the Customs Ordinance, which authorises it to prohibit ‘Any newspaper, pamphlet, leaflet, book or picture containing matter calculated to lead to acts made punishable under section 120 of the Penal Code’.

Relying on the recent judgment of the Supreme Court in Mohamed Razik Mohamed Ramzy v. Officer-in-Charge, Criminal Investigation Department & Others SC (F.R) No. 135/2020, the Commission found that intent remains an indispensable element of section 120 of the Penal Code and that this mental element is reinforced in Schedule B to the Customs Ordinance by the inclusion of the term ‘calculated’.

The Commission accordingly observed that both causation and intent, which are necessary features of individual culpability, must be established for a person to face legal consequences in terms of section 120 of the Penal Code.

The Commission concluded that the 1st Respondent must be of the reasonable opinion that these elements of individual culpability, causation and intent, are present in a given case to justify the permanent seizure of any publication. However, the 1st Respondent had not demonstrated that he had reached such an opinion.

The Commission observed that, while the impugned content in the Complainant’s two books (e.g. allegations that the Sri Lankan military had attacked civilians, and allegations that the
Janatha Vimukthi Peramuna supported violence) may be classified as ‘shocking’, even ‘offensive’ to some, or ‘disturbing’, there is no evidence to suggest that the impugned passages
were calculated to excite disaffection against the state, promote feelings of ill-will between communities or bring about any other harmful outcome listed in section 120 of the Penal Code.

The Commission reiterated that section 120 of the Penal Code concerns expressions that are directly inciteful and have the capacity to influence large portions of the population to act in a
harmful manner. It found that the impugned passages in the two books merely contain sentences that make allegations, which may prompt reflection among some readers, and which may be dismissed by other readers. They, in the opinion of the Commission, lack the potency expected of content that was likely to ‘excite disaffection’ or ‘promote ill-will’. It found that the continued seizure of the two books, which acted as a form of prior censorship of its contents, is both unnecessary and disproportionate in terms of meeting the legislative aims found in section 120.

The Commission also noted that the contents of these two books were claimed to already be in the public domain and had previously featured in Tamil language newspapers.

Therefore, the Respondents had not demonstrated how such content had thus far contributed to disaffection or promoted feelings of ill-will between communities. In this context, the Commission was unconvinced that the limitation in question is reasonable and concluded that the 1st Respondent’s continued seizure of the two books ‘Ippothum Inge Irandu Thesangalthaan’ and ‘Elluttal Nan Yuttam Ceykiren’ authored by the Complainant violated his right to the freedom of expression including publication guaranteed by article 14(1)(a) of the Constitution.

The Commission separately found that the sequence of events, and the explanations provided by the Respondents, indicated that the language of the Complainant’s books, i.e., the Tamil
language, was pivotal to their seizure. It observed that several state institutions that encountered these books treated them with prejudice and suspicion, which would not have been afforded to books of another language. Given that the Complainant’s two books have remained in detention for a prolonged period, i.e. more than six months, with no formal procedure, the Commission found a violation of article 12(1) of the Constitution. It also found that the actions of the 1st
Respondent were discriminatory on the basis of language, and violated his right to non-discrimination on the grounds of language guaranteed by article 12(2) of the Constitution.

Commenting on the application of article 14(1)(f) of the Constitution, the Commission found that Tamil-speaking people are a linguistic minority in Sri Lanka who enjoy the protection of both article 14(1)(f). The Commission recalled that the marginalization of Tamil-speakers throughout Sri Lanka’s post-independence period has been one of the root causes of the country’s ethnic conflict. Therefore, state functionaries should be particularly sensitive to the implications of treating Tamil language publications with prejudice. The Commission recognized that the essence of the freedom to promote one’s own culture and to use one’s own language is that citizens should have autonomy over the cultural and literary content they wish to produce or consume. The state should not interfere with this freedom except in very limited circumstances governed by article 15 of the Constitution.

Accordingly, it found that the 1st Respondent, through the continued seizure of the Complainant’s two books ‘Ippothum Inge Irandu Thesangalthaan’ and ‘Elluttal Nan Yuttam Ceykiren’, violated his fundamental right to the freedom to enjoy and promote his own culture and to use his own language.

In the circumstances, the Commission recommended that the 1st Respondent forthwith release from detention all copies of the two books titled ‘Ippothum Inge Irandu Thesangalthaan’ and ‘Elluttal Nan Yuttam Ceykiren’ authored by the Complainant.

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Presidential pardons: Govt. studying Justice Thurairaja’s recommendations – Minister

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Thurairaja / Harshana

By Shamindra Ferdinando

Justice and National Integration Minister Harshana Nanayakkara said yesterday that the Cabinet was studying a set of recommendations made by a Committee, led by retired Supreme Court judge Sithambarampillai Thurairaja, PC, regarding a systematic, fair and transparent mechanism for granting presidential pardons to convicted prison inmates.

Attorney-at-law Nanayakkara said so when The Island raised the issue in the wake of the ongoing controversy over prison authorities compelling General Secretary of the Bodu Bala Sena (BBS) Ven. Galadodaaththe Gnanasara to wear civilian attire when produced in court.

The Minister declined to elaborate but said the Cabinet of Ministers was yet to reach consensus on the recommendations. The NPP government, on 25 June 2025, appointed Thurairaja’s committee to study the provisions of the Article 34(1) of the Constitution, along with other statutory acts and judicial rulings.

Justice Thurairaja handed over his report to Justice and National Integration Ministry Secretary Ayesha Jinasena, PC.

The other members of the Committee were Deputy Minister of Mass Media Dr. Kaushalya Ariyarathne, Additional Secretary to the Ministry of Justice and National Integration Piyumanthi Peiris, Additional Solicitor General Nerin Pulle, Senior Deputy Inspector General of Police (SDIG) Legal Asanga Karawita, Chairperson of the Bureau of Rehabilitation Professor Wasantha Subasinghe, Specialist Dr. Chiththahari Abayanayake, former Acting Commissioner of Prisons Nishan Dhanasinghe, Acting Commissioner General of Prisons Prasad Hemantha Kumara, Senior Assistant Secretary (Legal) to the Ministry of Justice and National Integration Roshani Hettige, and Senior Assistant Secretary to the Ministry of Justice and National Integration Chandima Welikala.

The government called for guidelines regarding presidential pardon over a year before the Supreme Court rescinded, in September this year, the presidential pardon granted by Maithripala Sirisena to Ven Gnanasara serving a six-term of rigorous imprisonment for contempt of court. That pardon was granted in May 2019, the third controversial release by Sirisena during his presidency.

President Sirisena pardoned an ex-LTTE terrorist and also the Royal Park murderer Don Shramantha Jude Anthony Jayamaha, in 2016 and 2019, respectively. The Supreme Court, in June 2024, annulled the pardon granted to Jayamaha and ordered his arrest though he still remains free having fled overseas no sooner he was granted the pardon.

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