March, 12, 2019
The Government has infused nearly Rs. 300 billion cash to the economy of Sri Lanka following a host of recent measures taken to address the liquidity issue, Addressing Sri Lanka’s Chamber of Young Lankan Entrepreneurs (COYLE) 20th anniversary, Sri Lanka’s Prime Minister Ranil Wickremesinghe on Sunday (10) revealed. Premier had further said the Treasury has been requested to release Rs. 60 billion to settle part of the dues to construction contractors and more will be released. Secondly, Central Bank’s relaxation of statutory reserves ratio twice has released Rs. 150 billion to the market.
According to analysts the said figure which amounts to nearly US $ 1.6 billion or Rs. 300 billion at current exchange rate is even less than what has been borrowed by Sri Lanka form international markets raising US $ 2.4 billion last week, whilst the government has to pay over US $ 5.9 billion this year which is said to be the highest ever forex outflow as foreign debt in the 2,500 years of Sri Lanka’s written history records and the history beyond.
Meanwhile Prime Minister Ranil has further said that under the Enterprise Sri Lanka program, Rs. 60 billion has been lent and under the Gamperaliya initiative, Rs. 6 billion was released late last year and there will be more in the pipeline, whilst by the removal of 200% cash margin for vehicle imports another Rs. 22 billion will be released to the market.
“The Treasury and the Central Bank feel this is sufficient but if further need arises we will inject more cash to boost the liquidity,” Wickremesinghe had told the audience adding that low inflation is helping the economy as well and infusion is based on future investments, revenue and growth forecast. Premier has further outlined that his government has increased the Government revenue to 63.5% of GDP in 2015 to 75%; whilst primary balance which was a negative 2.8% of GDP or Rs. 302 billion in 2015 will be a positive 1.5% or Rs. 225 billion in 2019.
“The current account balance which was a negative 2.8% of GDP (Rs. 256 billion) in 2015 will be a positive 0.2% (Rs. 36 billion) this year. It will be first time Sri Lanka will have both a positive primary balance and current account balance after 70 years. The Budget deficit has been reduced from 7.5% of GDP or Rs. 829 billion in 2015 to 4.4% or Rs. 685 billion in 2019” Wickremesinghe had told the audience during the event.