It’s unhealthy to release huge amounts of dollars: Bandula

The government’s decision to release a huge amount of dollars to artificially stabilise the rupee value will result in grave financial repercussions, the Opposition MP Bandula Gunawardena said today.

He told a news conference that for this purpose the government had released US$75 million since August 20.

The MP said one of the main reasons for the devaluation of the rupee was that of foreign investors pulling out their investments from bonds because of the lack of trust in fiscal policies.

“The move to release a huge amount of dollars will gravely affect the people as it will increase the inflation, increase prices of imported goods and put pressure on the balance of payments,” he said.

The MP said the government failed to fulfil two key responsibilities which should be fulfilled by any government in the world. “It failed to establish national security and protect the rupee value,” he said and added that the decision of the Central Bank's Monetary Board to reduce two of its policy rates on August 23 resulting in the devaluation of the rupee because the investors pulled out their investments.

“When the policy rates are changed artificially, investors lose faith in the monetary system. The Central Bank has a responsibility to clarify these matters,” the MP said.  (Lahiru Pothmulla)


Video by Susantha

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