Treasury Secretary proposes to strengthen public finances while reducing money printing 

Treasury Secretary Mahinda Siriwardana told the media yesterday (18) that the Finance Ministry would take steps to stabilise the economy by strengthening public finances and reducing money printing.

He said in April 2022, about Rs 125 billion had been printed. The government expenditure too had increased despite escalating foreign exchange issues, he added.

The Treasury Secretary made said so ahead of the discussions with the International Monetary Fund in the US.

Siriwardana also told the media that a circular on government spending would be issued in the coming days.

The Treasury Secretary said that the government had to manage resources carefully and reduce the budget deficit as it had caused many problems across the economy.

“There has been a lot of discussion about the money issued by the Central Bank. That is happening because of problems in public finances,” he said.

The new Finance Ministry Secretary said that the state did not have enough revenue and that they were no longer in a position to get foreign loans.

“So, the entire deficit has to be financed domestically. Given that there are limited domestic resources, the Central Bank is compelled to find the money,” he said.

However, this is difficult in the present economic circumstances, the Treasury Secretary said.

Siriwardana said that they had not decided to halt domestically financed capital projects.

The Sri Lankan government on Sunday sent a delegation to the International Monetary Fund (IMF) for discussions over ways to get the lender’s loans.

Sri Lanka’s Finance Ministry said last Tuesday that the government had decided to suspend normal debt servicing of all affected debts for an interim period till it puts together an orderly and consensual restructuring programme supported by the IMF.