• Dep. Min. clarifies that reserve money had only a net increase of Rs. 137 b, not Rs. 1,226 b
• Says that broad money growth and low inflation are not signs of money printing, but indicate a stable econ. environment

Sri Lanka’s Central Bank (CBSL) has purchased $ 1.74 billion from the domestic foreign exchange market since the NPP government took office last year, while directly injecting Rs. 522 billion into the market, Economic Development Deputy Minister Prof. Anil Jayantha Fernando.

Speaking yesterday (21) at Parliament, Fernando denied claims that the government has printed Rs. 1,226 billion worth of money since they took office, stressing that it was the overall increase in broad money during the period.

Fernando said broad money increased by Rs. 1,226 billion during the period, due to the net increase in reserve money and the efficient money supply from the banking sector, supporting the economy.

He said expanding private sector credit shows that people are getting loans and withdrawing savings to use for business purposes.

Fernando also said that the increase in reserve money, which is interpreted as money printing, had only a net increase of Rs. 137 billion during the period.

Moreover, he noted that the government has only borrowed Rs. 76 billion from the central bank during the period, as the government heavily relies on people through government securities to fund the budget deficit of Rs. 2,200 billion in 2025.

He also clarified that the government has not taken monetary financing from the central bank through issuing Treasury bills and bonds to the central bank to cover the budget deficit, as done in the past.

Fernando pointed out that if the government had printed over Rs. 1 trillion, as claimed by some, then the inflation numbers would have been higher than the current figures.