Sri Lanka faces severe shortage of rupees along with dollar crunch

Sri Lanka will be facing severe shortage of rupees while reeling from the foreign reserve issues and the dollar crunch, several top officials warned, as the country has reached the required limit per year in printing money.

The country’s precarious financial situation has been brought to the notice of Prime Minister Mahinda Rajapaksa at a meeting with senior officials in several leading ministries recently, the PM’s office sources revealed.

They have requested the Prime Minister to brief this situation and convey their warning to the President and the Finance Minister to take immediate remedial measures.

They have also emphasised the need to increase fuel prices to prevent the impending financial crisis

These officials informed that it was not only the shortage of dollars that the Government had to worry about, but a possible shortage of rupees as well. 

It is a well-known fact that the Government receives money from the sale of Treasury Bills. Around 90 per cent of the bills are purchased by state owned funds and private banks while around 10 per cent is bought by the Central Bank.

Since recently Central Bank has been purchasing around 90 per cent of the bills. The Central Bank finances these purchases by printing money, several economic experts said. (Bandula)