Former Minister of Energy Udaya Gammanpila has revealed the reasons behind the rapid depreciation of the Sri Lanka Rupee.
In a Twitter message, the Parliamentarian highlighted the following reasons for the rapid depreciation of the Rupee:
1) Artificially holding the exchange rate for a long time
2) Huge gap between import expenditure and export income
3) Maintaining interest rates lower than inflation, compelling people to consume instead of saving
4) Increasing demand for goods by printing currency
5) Increasing demand for imported goods by commencing new projects which require imported goods.
6) Heavy dependency on foreign loans for financing Balance of Payment gap
7) Heavy exposure for international money market borrowings from which are difficult to renegotiate
8) Failure to renegotiate foreign debt on time
The reasons for the depreciating Rupee have been highlighted at a time when Sri Lanka is in the midst of a deep economic crisis. (NewsWire)