Deputy Finance Minister Dr Anil Jayantha Fernando told Parliament on Thursday that the weakening rupee does not indicate a deeper economic crisis, pushing back against what he described as “misleading attempts” to equate exchange rate depreciation with collapse.
Speaking during a debate on new regulations under the Imports and Exports Control Act, Dr Jayantha said there is “no logical basis to claim that a rise in the exchange rate automatically results in an economic downturn.”
The Deputy Minister framed the situation as one of “active management rather than crisis.” He acknowledged that exchange rate movements can put pressure on import prices but said those effects are being contained under the inflation management framework.
Dr Jayantha pointed to a series of anticipated dollar inflows expected to strengthen the country’s external position. They include a projected USD 700 million disbursement from the International Monetary Fund following the May 27 Executive Board review, alongside further pipelines from the Asian Development Bank and the World Bank potentially worth hundreds of millions of dollars more.
In remarks reported by the Daily FT on Friday, Dr Jayantha quantified the multilateral pipeline: up to USD 480 million from the ADB during 2026, USD 150 million from the World Bank, and a further USD 50 million from an affiliated institution. He said the government does not expect significant difficulties in managing the foreign exchange position in the period ahead, and would meet the debt-to-GDP reduction target set for 2032 “well in advance, by the end of this year.” Dr Jayantha attributed the recent panic in the forex market to a Central Bank statement to the Committee on Public Finance, saying importers had begun booking forward contracts and exporters had withheld earnings in anticipation of further depreciation.
His strongest warning was reserved for what he called a dangerous economic misstep. “Our approach is not to halt or contract the economy in search of solutions. That path has pushed other countries into crisis,” he said. The government’s strategy, he explained, is to sustain economic momentum while addressing financial pressures in parallel.
He attributed the current depreciation largely to global factors rather than domestic weaknesses, concluding that externally driven currency moves “will not derail growth nor collapse the economy.”
The remarks form the government counter to SJB MP Harsha de Silva’s “frozen market” framing earlier on Thursday and to the Opposition’s unified call for an All Party Conference. They also pair with IMF mission chief Evan Papageorgiou’s same-day statement that Sri Lanka’s policy framework is “considerably stronger than in the past.”
