Heavy intervention shoring up rupee - UNP

[TamilNet, Monday, 06 November 2006, 02:23 GMT]
A collapse of Sri Lanka’s currency was being stymied by heavy intervention by the Central Bank, the main opposition party said Sunday. The central bank had spent 352 million dollars from January to September to defend the rupee, with 121 million dollars being spent from September 01 to 19, former Deputy Finance Minister and United National Party (UNP) parliamentarian, Bandula Gunewardene, told Lanka Business Online (LBO).

Gunewardene charged that senior bureaucrats in charge of economic policy was deceiving President Mahinda Rajapakse, who is also the finance minister, and hiding their incompetence.

“Inflation has now gone up to 17.2 percent, and oil prices are falling,” he said. “They can no longer say inflation is caused by rising oil prices. It is because they are printing money to finance the budget deficit.”

He said that in their time, the UNP had stopped printing money and brought inflation down to 3 percent despite rising oil prices.

“The numbers speak for themselves. Can anyone deny that inflation is now 17.2 percent and the rupee is 108? Can anyone say that our total foreign reserves had not fallen?” he asked.