Foreign reserves drops to USD 1.5 billion: Eran says government unable to refute opposition charges

Eran Wickramaratne

The opposition alleged in Parliament that foreign reserves had dropped to $ 1.5 billion, which included the gold reserves of $ 300 million. The government did not refute the Opposition claim that the available cash reserve was only USD 1.5 billion less than one month’s import payment, lowest in history, SJB MP Eran Wickramaratne said.

The former State Minister told a news conference at the Opposition Leader’s office in Colombo on Monday (29) that as a result, essential food items and fuel shortages would follow and the country could face power cuts in the future.

The MP also said that manufacturers and businesses would have been able to face the consequences if the government had informed the country well in advance. The oil refinery was also closed for the first time in history.

When the present government came to power, the foreign reserves, which was more than $ 7 billion, had now decreased to 1.5 billion dollars as it was more concerned with giving relief to its cronies than governing the country, he said.

He added that despite reports that the International Monetary Fund (IMF) had provided emergency assistance to 80 countries, including Asian countries such as Pakistan, Nepal, the Maldives and Myanmar, the government had not yet responded to a question raised in parliament a year ago whether it had received a rapid financing instrument from the IMF. Sri Lanka did not receive the assistance because the International Monetary Fund (IMF) had speculated that Sri Lanka would not be able to repay its loans due to the depletion of foreign reserves which needed a comprehensive reform process.

The present government, which had criticized and repealed the fuel price formula implemented by the yahapalana government as a timely solution to the problems faced by the country, now insisted that the fuel formula was good for the country. That proved that they did not have a proper understanding of economic management or governance.

The foreign reserves which were around $ 7 billion in 2019 had been gradually declining every month up to $ 1.5 billion by November 2021 making it inadequate to meet the one month’s import needs.

Even the poorer countries than us in Asia received this Covid-19 emergency aid from the IMF, Sri Lanka was not included in the recipient lists due to the assessment of the International Monetary Fund that Sri Lanka needs major economic reforms in the context of the collapse of its foreign reserves.

According to the Standing Orders of Parliament, when a question is raised, it can be adjourned only twice. However, Wickremaratne warned that the government was still postponing his question ostensibly collecting data and urged that it was the responsibility of the government to tell the people the truth about the dollar shortage and its consequences in importing essential goods to the country and prepare them in advance, realizing that deceiving the people in prevarication of the fact is not a solution to the serious situation facing the country.

(Source: The Island)