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Sri Lanka wouldn’t have been in crisis if CBSL had floated rupee in April last year –Dr. Wijewardena

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By Shamindra Ferdinando

Former Deputy Governor of the Central Bank, Dr. W. A. Wijewardena says the country wouldn’t have been in the current predicament had the Monetary Board floated the Rupee in April 2021, six months before Ajith Nivard Cabraal succeeded Prof. W.D. Lakshman.

Consultant on banking, finance and economics, Dr. Wijewardena said so when The Island sought clarification regarding declaration on ‘Hiru’ on Sunday (13) that the incumbent government since Dec 2019 squandered as much as USD 5,500 mn trying to prevent the depreciation of Rupee. Dr. Wijewardena explained how the failure on the part of the Monetary Board to take remedial measures at the required time caused a catastrophe.

Dr. Wijewardena pointed out that Cabraal, who succeeded Prof. Lakshman, too, failed to address the issue. Cabraal quit his SLPP National List seat to receive the Governor’s post on Sept 15, 2021. Cabraal served as State Minister of Money and Capital Market and State Enterprise Reforms at the time of his resignation.

The retired CB Deputy Governor emphasised that the much touted ‘road map for economic recovery’ that had been announced on Oct. 1, 2021, didn’t recommend depreciation of the Rupee. The outspoken former CBSL official said that the depreciation of the Rupee/floating of the Rupee hadn’t been among the remedial measures announced by the incumbent governor.

The much-delayed decision to float the Rupee in the second week of March this year should be examined against the backdrop of the overall failure of the so-called ‘road map for economic recovery’ to achieve its targets within six months, Dr. Wijewardena told The Island.

Responding to Hiru interviewer, Dr. Wijewardena said that though CBSL expected the country to receive as much as the USD 10.5 mn during Oct-Dec, 2021 period, it didn’t materialise. Alleging that the timing of the floating of the Rupee had been unnecessarily delayed, Dr. Wijewardena asserted that the consequences could be quite devastating. The veteran banker compared the cash-strapped Sri Lanka economy with an uncontrolled kite.

Dr. Wijewardena cited the pathetic failure on the part of the entire banking system to meet USD 16 mn requirement to pay for a crude oil carrier underscored the crisis the country faced. Responding to The Island queries, Dr. Wijewardena questioned the culpability of the Monetary Board as regards the handling of the economy.

The current five-member Monetary Board consists of the Governor Cabraal (ex-officio), Treasury Secretary S.R. Attygalle (ex-officio), Sanjeewa Jayawardena, PC, Dr. Mrs. Ranee Jayamaha and Samantha Kumarasinghe. Mrs. Jayamaha, an ex-Deputy Governor, CBSL and Multichemi International Ltd Chairman Kumarasinghe joined the Monetary Board in late June 2020 whereas Jayawardena received his appointment in Feb 2020.

 The Monetary Board couldn’t absolve itself of the responsibility for the current crisis, Dr. Wijewardena said, urging the government to review the entire situation without further delay.

Basil Rajapaksa replaced Mahinda Rajapaksa as the Finance Minister in July last year.

According to Dr. Wijewardena, the banking system experienced a critical shortage of Rupees in addition to the foreign currency crisis. Dr. Wijewardena estimated that the current Rupee shortage at Rs 700 bn.

Dr. Wijewardena urged the CBSL to immediately increase bank interest rates from 7.5 percent to at least 15 as an initial measure to address the crisis. Dr. Wijewardena, who had served the CBSL for over 40 years emphasized that the recent decision to increase interest rates from 6.5 % to 7.5% was not adequate at all.

Sri Lanka couldn’t address the developing crisis by securing limited funds from India, China and Bangladesh. Instead, the assistance of the International Monetary Fund (IMF) should be secured, the veteran banker pointed out, adding that those who dismissed repeated calls to seek IMF help to restructure Sri Lanka’s debt should accept responsibility for the pathetic state of affairs today.

He compared a country’s foreign reserves with that of savings of an individual. “Savings are utilized in an emergency,” Dr. Wijewardena said, pointing out the absurdity in using foreign reserves to protect/prop up local currency. The ex-banker recalled how the Thai government moved court against the Governor of its Central bank Rerngchai Marakanond for spending USD 4.6 bn or 2.5 bn Pounds to prop up Baht during 1990s financial crisis. The Bangkok Civil Court in May 2005 directed Marakanond to reimburse the Bank of Thailand within a month, Dr. Wijewardena said. Although, the Supreme Court cleared him a decade later, the case established culpability of a decision maker/ decision makers in such a situation.

As the Parliament is accountable for public finance and enactment of laws, the responsibility of the House, too, should be examined, Dr. Wijewardena said.



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Establish a clean local governance system that utilizes budget allocations transparently for rural development – Prime Minister

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Prime Minister Dr. Harini Amarasuriya emphasized the need to create a clean and transparent local governance system that effectively utilizes budget allocations for the development of the rural sector.

The Prime Minister made these remarks on Friday (11), while addressing a public gathering held in Karainagar, Jaffna.

Elaborating further, Prime Minister Dr. Harini Amarasuriya stated:

“This country is rich in cultures and traditions and inherits a proud and prosperous history.

I was deeply moved by the information I received about Karainagar. In 1977, around 80,000 people lived in Karainagar. Unfortunately, today it has dropped to 10,500. What happened to the rest of the people? I also learned that Karainagar is home to some of the most educated and affluent people in the Northern Province. That is remarkable, but the issue is that in order to become educated and affluent, they were forced to leave Karainagar.

Who speaks up for those who could not leave? They are citizens of this country. They are entitled to have equal rights like everyone else does. As the Minister of Education, I looked into the education system in Karainagar. I discovered that there are only two schools offering GCE Advanced Level education, with only two teachers in total. Further, all students who have passed the Grade 5 scholarship exam leave Karainagar to Jaffna for further education.

Throughout the years, there were changes in governments, presidents, national administrations, members of parliament representing this area, local governments, and provincial councils but what have they done to uplift the education of Karainagar?

Education increases the value and prosperity of people. Education is vital as such. However, for decades, the right to quality education has been denied in this region. In addition, there is a severe water issue in Karainagar. Access to clean drinking water which is a basic necessity, comes at a cost to the people in this area. Various projects launched to provide drinking water have never been completed due to corruption.

Further, roads, transport, and many other services have deteriorated due to corruption at the local level. It has been 16 years since the war ended yet what has changed since then? Why have these issues not yet been resolved? That is why the upcoming local government elections are crucial. Problems at the local level must be addressed by local government institutions.

About a month ago, the first budget of the government has been passed.

A significant allocation has been made from all local government accounts for education, health, public welfare, infrastructure, and public transportation but these funds must be spent wisely.

For that, local governments should be governed by clean and corruption-free environment. Therefore, in this election, we must elect people who are free from corruption and dedicated to the purpose of serving the public. In 2024, the people of this country made a decision to change the political culture. On May 6, they will once again have the opportunity to make a thoughtful decision for the betterment of their villages.”

During the event, Minister of Fisheries . Ramalingam Chandrasekar also shared his views:

“Today, the political morality we expected for has taken root in this country. Unlike the governance of previous governments, the representatives of the current government are not exercising the power to enrich themselves and some even do not hesitate to return their salaries for serving the general public.

Today, the public service receives higher salaries, and the government is taking possible decision for the benefit of the people.”

The event was attended by Members of Parliament Shri Bhavan and Ilayankumar, along with other public representatives and candidates contesting in the local government elections.

[Prime Minister’s Media Division]

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Warm Weather Advisory issued for Eastern and Uva provinces and Polonnaruwa and Mullaitivu districts.

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Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre of the Department of Meteorology for 12th  April 2025.

The public are warned that the Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at some places in Eastern and Uva provinces and Polonnaruwa and Mullaitivu districts

The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.

Effect of the heat index on human body is mentioned in the table below and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.

ACTION REQUIRED

Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated. Dress: Wear lightweight and white or light-colored clothing.

Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491.

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Sun directly overhead Adiyakulam, Veppankulam, Padawiya and Kuchchaveli at about 12:11 noon today [12]

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On the apparent northward relative motion of the sun, it is going to be directly over the latitudes of Sri Lanka during 05th to 14th of April in this year.

The nearest areas of Sri Lanka over which the sun is overhead today (12th) are Adiyakulam, Veppankulam, Padawiya and Kuchchaveli at about 12:11 noon

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