19 November, 2019

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Currency Crisis: “Sri Lankan Rupee Has Overshot Its Fair Value” – Harsha

Giving a new twist to the controversy surrounding the Sri Lankan currency, Policy Planning and Economic Affairs State Minister Dr. Harsha de Silva said the rupee had “overshot” its fair value.

Dr. Harsha de Silva

The State Minister, a key economic strategist of the current government, also added the rupee should strengthen somewhat in the coming weeks. “But, the fundamental issue is lack of export,” he added. .”

“The Sri Lankan rupee is again under pressure. The reasons for the current episode are primarily exogenous; driven mainly by outflows of US dollars from emerging markets due to a robust US economy, gradual tightening (of interest rates) by the Federal Reserve and investors taking refuge in the US with escalating trade tensions with China. While the impact of this shock is being felt across the world, current account deficit emerging countries, like Sri Lanka, are getting battered more than those with healthy trade balances,” de Silva said, sharing his opinion on the currency crisis, on Facebook.

The comments come as the Sri Lankan currency has plummeted to as low as Rs. 170 against the US Dollar. Several spokespersons of the government, including Finance and Media Minister Mangala Samaraweera said, the depreciation of the currency was not a sign of a weakening economy.

“However,” de Silva said, “whether the slide we saw was fully warranted is a question I have in my mind. I feel the LKR at 170 has overshot its market determined fair value. It could be partly disruptive speculation and partly genuine lack of confidence in the Central Bank to have the situation under control. However, I think both these issues have now been addressed and the LKR will find its equilibrium once the dust settles. Some appreciation of the currency is warranted.”

“The Central Bank must be credited for being responsible and not burning reserves to defend the LKR at levels earlier not feasible. We saw how during the 2011-12 home-made crisis (having held the currency artificially at 110 levels for months) ended up; losing almost USD 4 billion or close to half of the reserves in just a few months and yet the LKR depreciating by close to 13 percent.”

De Silva said his view was that the Central Bank could maintain the LKR at a level adjusted slightly upwards to correct for the overshooting.

“A criticism however, is that they should not sterilize the interventions; in other words, the loss of LKR in the market to purchase USD sold by the CBSL should not be replaced with new LKR by the CBSL. Unsterilized defense will lead to some tightening of rates but that is an okay price to pay for a short while to stabilize the markets and build confidence around the new equilibrium exchange rate.

The (brave) decision of our government to introduce the fuel price formula is certainly a huge boost to limit demand and the temporary measure like 100 percent margin on LC for import of cars for personal use will help stem import demand. Social consciousness of our high income people are also important now; perhaps postpone by just a couple of months that new luxury car or that trip to Alaska. These will all help to cut the demand at the margin.

I am not planning on explaining the more fundamental reason for the continuous pressure on the LKR today, but those who follow my writing are fully aware of how strongly I have been arguing for even stronger policy measure to increase the exports to GDP share of Sri Lanka including FTAs and unilateral liberalization of trade to increase investments and more conducive immigration policy to bring in technical expertise to move from producing low value simple products to high value complex products. That is the only sustainable solution to the continuous pressure on the LKR and to create high wage jobs.

When our exports to GDP share started to decline steadily year after year; from around 27 percent in 2005 to around 12.5 percent in 2015 with the Rajapaksa regime dismissing it with talk of ‘economic nationalism’ the writing was on the wall. What we see today is clearly and absolutely the outcome of that purely short term populist economic policy of 10 plus years. I shudder to think what could happen if God forbid those who continue to advocate inward looking policies grab ‘power’; where will the LKR stop? 500?

We are doing our best to turn the declining export ratios. I am happy to note it has finally turned around. WE have succeeded in getting duty free access to the EU via GSP plus and exports are increasing. We have successfully signed the first FTA in decades with Singapore and others are in the offing. We have liberalized trade further and will do so with immigration,” he added.

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Latest comments

  • 7
    2

    Expatriate Remittances: One of the important factors that can support the rupee is the remittances made by expatriate workers. Out of these, the housemaids make a big contribution by remitting a relatively large portion of their income back to Sri Lanka, while other categories remit a much lower portion of their income. Although the salaries of the housemaids are low compared to the professionals, numerically the they out number other categories by a huge margin. Thus we find the housemaids unwittingly playing an important role in this scenario.
    .
    Consequently, we have to consider how we can improve the remittances. Here the representatives of Sri Lankan Banks have to play an important part. Taking the example of Bank of Ceylon, a couple of years back, the Bahrain representative made a huge effort to improve things. Instead of waiting in his office, he went out and met prospective customers and started NRFC accounts for them with ATM facilities to withdraw funds in Bahrain. He attended each and every Sri Lankan event held in Bahrain for this purpose. He cut through red tape and made banking facilities available to many Sri Lankans.
    .
    Unfortunately, the next representative was found to be quite the opposite. One had to make a dozen calls just to contact him. I cannot understand why the Bank sent such a useless and lazy person when there are so many efficient officers to select from.
    .
    I would like to end this comment by stressing the importance of the expatriate workers in the Dollar inflows and the government should do the utmost to make use of it for the benefit of the country and the workers concerned.

    • 6
      3

      Very true. But hardly ever do you see those who squander public money hang their heads in shame when they see those housemaids returning with their pathetic purchases.
      .
      We live on them.
      .
      And let’s face it – a number of them get raped as they get across. Remember the saintly prostitute, Sonya, in Dostoevsky’s Crime and Punishment.
      .
      We men don’t usually read this sort of thing:
      .
      https://www.colombotelegraph.com/index.php/menstrual-hygiene-a-necessity-not-a-luxury/
      .
      Excellent article. Just look at the the comments; so many are shocking.

      • 6
        2

        Hi Mr Sinhala Man,

        even if I had been thinking to travel to lanka, but I put it off.

        Whenever I will get there, I would like to see you.

        See how Rajapkashe rascals interpret the curreny crisis.

        He louds and boast today as if Hambantota harbour was profit making project. But we knew by the time current govt took over, not a ct was earned by both projects right ?
        The very same audience – gawked to his voice cut. How come ?

    • 6
      3

      Thanks. Edwin mahaththayo.. your comment could help the masses.

      I am now taken aback from some articles. I am so fed up of lanken issues.

      I wonder why the people rally round to support Rajapakshes. See how that bastard son Namal baby added his 2 cts worth in the interview given in India.. said that all was hunky dorry in his father s days.
      I know myself, nnhow my friends got hurt being unable to face it in the country.

      • 5
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        Sam, I have another idea. Help the returnees to set up small businesses. These poor souls squander the money on electronic gadgets such as expensive smart phones. They cannot afford to buy these outright, but the phone companies here entice them with long term credit at a high interest rates.
        .
        Many are forced to buy such gadgets under the pressure of their relatives.

    • 6
      1

      Lanka has been betrayed by all its corrupt politicians
      Sirisena when back from his UN -NYC jaunt must sack Bond scam Ranil and Mangla and prevent further economic disaster, inequality and new ethno-religious violence, as religion is weaponized on Facebook to attack Muslims.
      There is not FDI going to Lanka because rupee is crashing and no investor with brains would invest in a country where the Central Bank, the most important financial institutions of a cournty, was scammed by the PM.
      Ranil is a market fundamentalist and following Fake Advice and outdated Economic models of and for deregulation and liberalization sold to him by US Govt’s neo Con Millennium Challenge Corporation (MCC) and IMF.
      MCC wrote Bondscam Ranil’s Vision 2025, and has been developing a Fake Aid “Compact” for Sri Lanka for the past 3.5 years with promises of Fake aid!
      Now MCC claims it wants to build more roads although Lanka has the highest road density in South Asian, and is also using Singapore FTA to get land cheap in Sri Lanka.
      MCC head honcho is right now in Lanka to prevent Central Bank intervention and to let the rupee crash– See the pics with to Lanka’s Hair dresser finance minister. MCC also got Bondscam Ranil to set up the Economic Subcommittee to undermine the Cabinet as well as Mangala Yapa’s MCC funded Agency for Development capture Economic Policy Making and Policy Space of Lanka and undermine national over site institutions, since US has not got deep pockets like China to fund corrupt Lankan politicans!

      • 4
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        Right on Don, MCC is undermining national institutions and think tanks and funded Sujeeva Senasinhe to go to Harvard then and write a book justifying the Bondscam– in Sinhala!
        Meanwhile The Neo Con Advocata Institute, IPS and LKI have been capture by US-Japan -ADB funded neoliberals as Tamara Kunanayakan said.
        These supposed economic think tanks have not made a single coherent statement on the sorry crash of the Lankan currency though supposed to do economic policy!. So too Poverty Analysis Center that has no comment re poverty impacts of rapid devaluation of rupee
        CT Eds. pl. do a story on this sorry state and intellectual bankrupcy of “research institutions” in Lanka today.
        Meanwhile The US has been blaming China (which what ever its shortcoming actually builds infrastructre), for Lanka’s debt trap and sending its lovely “Pacific Angels” Marines on war ships to do humanitarian disaster preparation in Lanka and Fake war games at Nelum Pokuna!
        But it is the Lankan Economy that is in Disaster caused by Washington IMF and MCC’s Fake aid!
        Ha, ha, ha!
        A new boat was given last week to the same SL navy that disappeared the boys in Tinco. by Trumpland!
        Also, Peace corps is running around infor. gathering planting Fake news all over miracle of Modayas to distract all of US.
        Long Live Miracle of Modayas!

      • 0
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        The present crisis was brought about by all govts since 1977 including the 1977 govt.They killed all local industry and agriculture.We can over come this.Reduce import of pertoluem oils, depend on locally manufactured alcohols.

        Develop agriculture.
        Make the use of vehicles over 1500 cc non attractive by pricing fuels for them abvove Rs 10,000 per lts.

    • 1
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      edwin rodrigo ,
      Already all governments kept their hands clear from taking responsibility of
      looking after their citizens , leaving it to fathers , mothers and children .
      Parents have a duty to look after their children and not when they are in their
      adulthood ! The pensioners and country’s young adults are the responsibility of
      their governments . Our children only get free education and nothing else ! Our
      senior citizens get nothing , pensioners in our country means mainly public
      sector workers and the rest left to rot ! Only some lucky ones have children to
      look after them and these children sacrifice their youth to work in the deserts of
      Arabia to pump all their earnings back home to look after families . Why must that
      be the case ? No country on this planet gives money to one worker equal to more
      than his mouth ! Wherever he works , he gets only his dues for his expenses ! And
      it is life that he sacrifices to bail out the rest of his family which is the job of our
      governments . The governments have now made it part of the culture to return
      services children received from parents , in the name of religion , good culture ,
      love and care etc, etc ! In my view , no government should rely on foreign
      remittance . Reduce unnecessary imports , live within your means and look after
      your citizens ! How ?, O k let the government break its head spending their time on
      it and don’t come to power to tour the world lecturing others as if everything back
      home is fabulous . Don’t waste other people’s hard earned money to run round the
      country opening bridges and distributing sewing machines and reading glasses !
      In the West , they love to visit most , there are FUNERAL DIRECTORS EVERYWHERE
      TO FACILITATE ONES OWN FUNERAL so that when one dies , no burden on his family
      is left behind ! And this is how human dignity is looked after !

  • 7
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    Can the Rupee overshoot its value on its own accord?
    There are international aspects over which there is little control, but what about good housekeeping?
    Rajapaksa has to take a fair share of the blame, but what has the regime that succeeded his done to put things right?
    We are this sorry state not because of any inward-looking policy but the ‘outward-looking policies’ that government after government adopted since 1978.

    • 1
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      SJ

      “Rajapaksa has to take a fair share of the blame, but what has the regime that succeeded his done to put things right?”

      Why?
      The Weeping Widow gave him and opportunity to be educated. She devised a scheme for MP’s to qualify as lawyers in 1970s. He was educated. Educated means having a qualification. Hence Mahinda could do no wrong and he is still a member of SLFP not FP.

      “looking policies’ that government after government adopted since 1978.”

      If 1977 didn’t happen, we will still be using pigeon post, marathon runners, smoke signals, talking drums, ………………. to sent and receive mails or stamped letter, telegram, Telex, Morse code, radio, ……………………

  • 5
    2

    This focussing on economic must go hand in hand with a willingness on the part of politicians to relinquish relinquish “power” after some time, and hand over to younger people (with relevant experience and qualifications) who have fresh ideas for fresh challenges.
    .
    Experience doesn’t mean 40 years of it – then you are in your dotage (as I am!); we should by then have learnt the lessons of history, and could be senior citizens who could contribute some of the reflective memories of past events, but we must move out of implementation.
    .
    The list of those who it is claimed lack experience seems to include Sajith Premadasa, Nagananda Kodituwakku, Eran Wickremaratne etc. This is ridiculous! These people are over 50 years old. How they can get known to the entire country is the problem.
    .
    That problem does not exist with Kumar Sangakkara – but he must re-consider the ethics of advertising. Oh, that’s for political leadership; we seem to be considering Economics and Finance. When that is the case, we are fortunate to have Dr Indrajith Coomaraswamy who is not yet in his dotage, and young Harsha de Silva:
    .
    https://en.wikipedia.org/wiki/Harsha_de_Silva
    .
    Good heavens! The guy is 54 years old. You see what I mean? Is it part of our Asian culture tht we want to prop up living corpses? John Amaratunga (78 years), AHM Fouzie (80 years); Gamini Lakshman Peiris is only 72 years old – and achieved so much as a young man – and has disappointed so much during the past decade.
    .
    It’s time we threw these old codgers out. I confess that I, too, belong to that category now!
    .
    By the way, congratulations to the Maldives for having voted more sensibly than we seem to!

  • 4
    3

    Former President should take full responsibility to make this country into an unstable status and damage to our economy. A simple example is that when Srilankan airlines worked closely with Emirates it was in good shape. But Srilankan walk out from Emirates because of a personal dispute between President & Emirates. Since then Srilankan performance declined. There are many more examples in this country to explain between 2006 and 2015. We did not have a people government. We had our governance for personal benefit. We couldn’t have a rule of law in this country to take action against those who failed to accountability for their failure. Even the ne govt. is failing. Mahinda recently said that if people give power to him back he will resolve the issues. But he never accepted that he made mistakes (actually they are not mistakes, they are inentionally made crimes) and he will never do that mistakes again. He will never apologise to the people. Unless we realise the truth, we will reach to the status of the poorest African nations very soon. God save Srilanka!

  • 3
    0

    I see many politicians making comments about the state of the Lankan Rupee , and where it is headed . Are they providing useful information to currency speculators and
    stock market punters ?

  • 2
    0

    Like I had said in my comment yesterday in response to Rajapaksas pointing fingers at the government, this situation has to be accepted, not minding the cause of the issue.
    .
    What will however matter is how the government will respond and how we can actually turn this thing around to our advantage. Increase exports and decrease imports.
    .
    In trying to do that we will have to focus on our local strengths and build upon those. By and large we should be able to emerge victorious if we stick to a solid game plan.
    .
    However if we compromise ourselves by selling out and forgetting the needs of our country ahead of our selfish needs, then it will be a catastrophe. Much like our cricket team, the players and the management whom I am sure are selling matches to the highest bidder.
    .
    Something has to give or someone has to make decisive calls and put essential policy in place. We have to anchor ourselves and stop this slide on the slippery slope Mara and co. started.
    .
    Obviously this is beyond Gamarala and his brand of governance. Someone sensible must step in an act. Its now or never. Put aside our differences for once and fight for the progress of the entire country and all those in it.
    .
    Long live Sri Lanka.

  • 3
    0

    When the currency has been set to float how can that overshoot?

    If it’s impossible to boost exports within short period, why don’t govt. control/halt unnecessary imports; luxury vehicles, chairs etc. & spending millions on MPs to make foreign journeys in order tokeep them within?

  • 3
    2

    Harsha De Silva is responsible for the Crash of the Rupee because he is the in charge of the Economy (Besides Ranil, Mangala and RAVI the LIAR). Some how these things won’t happen after 2020, as the Economic consultant for the govt will be Ranil’s HARvard Report authored by MCC. So, I expect HArsha De Silbva won’t be around by 2020.

  • 7
    1

    This man Harsha is either genuinely incapable of understanding economics or he is lying to protect the idiotic UNP economic policies. He says he shudders, why, is it? because he has no idea where the economy is headed? These so called economists with PhDs from obscure entities in the Midwest think that all in Sri Lanka are stupid as they are. The 2015 money printing during the so called 100 day program in order to win the parliamentary elections was the beginning of the end right at the beginning. There are 1.4 million public servants and the UNP printed money to pay them a salary increase which is zit now because it is eaten up by the increased prices. First, Ranil and Mahendran and the rest of the Kabal’s experimented with Keynesian economy failed miserably, and keeping a crawling peg and allowing the rupee to value itself while playing havoc with governance, and thus destabilizing the government, and the confidence in it, chased out the FDIs already in, and scared rest. So dear old SLR is at its natural place and God save the wage earners.

  • 7
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    Economics GURUS easily forget the basics in their analysis for Dollar
    deficiency ! They don’t take into account the apples that was once found
    only in major three four cities have now found their way into almost all
    villages .We don’t locally produce them and so are many other food items !
    In seventies , cars were allowed to be imported only by foreign exchange
    earners . Grapes , pears , apples – all local produces , were a luxury and today
    they are common fruits but imports ! The consumer base expanded but not
    the Dollars ! Nearly one million Tuck Tuck means , how much for spares ?
    Textile use has risen drastically , maybe even ten times than the seventies !
    Amount of Hospitals and Pharmacies that prescribe medicines ? Where there
    was only one pharmacy three decades back has now seven or eight ! So many
    patients , all due to the mouths and stomachs that have expanded as a result of
    the DEVELOPMENT PROJECTS OF SUCCESSIVE GOVERNMENTS ! The same
    people who walked two to some times four miles in order to save five to twenty
    cents , jump into a Tuk Tuk today and pay hundreds for the comfort . Suddenly
    all have shot up the ladder in competition but most of the time at somebody
    else’s expense , one who works in the Mid East probably ! Dangerously , a totally
    new culture that is a vulture , has engulfed the whole nation . Any nation blind
    to such sudden surge in luxury without proper means would learn bitter lessons .
    Nobody in the world can afford to have luxury at somebody else’s expense !

    • 3
      1

      whywhy well said, yet we cannot live in the 70s while the rest of the world move forward, I could as my parents did but most would not, printing money is our arch enemy and it gives a false sense of wealth and we go forth and spend while the country stays as an import centered economy and so the SLR caves. Now we have come to a point where the only quick fix would be to open the doors wide to FDIs under a stable government.

      • 2
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        wannihami ,

        Thank you for you reply . As for your ref ” we can not live in the 70s while
        the rest of the world move forward.”I didn’t mean that we get back to our
        70s or not matching up with the world trends ! Limit is what I propose to
        maintain in a country like ours that heavily depends on imports ! We need
        to learn to live within our means , understand our capacity . Just take an
        example , it is reported that our country has over twenty million mobile
        phone users , the whole population itself is 22 million . You think all these
        phones are in good use , I mean productive ? One gentleman complains ,
        one of his relatives gave him a ‘ missed call’ and he rings back to know
        why , the answer was , ‘ to see if he’s o k ! You can provide tons of excuses
        for such behaviour but how pathetic is it ? You have a phone and no money
        to use it ! My worry is , we have a citizenry that is simply greedy of everything
        and beyond any economic control ! Learn to live within your means and many
        strains that you bring upon yourself will ease ! One major downside was, when
        free market economy came into existence , the general public was not ready
        to face the flood of imports ! That was a time “imported” was what they wanted !
        And now ? IT IS PAY BACK TIME ! MY POINT IS , LOOK AFTER YOUR WALLET !

        • 1
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          whywhy

          wannihami still lives in the early 1970s, reminiscing weeping widow’s reign and her Kahatta Hakkuru days, stagnant economy, spiralling prices of essential goods, shortage, brutal killings, blatant racism, with restriction on freedom of movement (exit visa to leave the country), a great blessing for rent seeking mudalalis who were connected to either ruling party or the functionaries ………………………..

  • 3
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    Policy Planning and Economic Affairs State Minister Dr. Harsha de Silva says (sagaciously to boot!), “Sri Lankan Rupee Has Overshot Its Fair Value”.
    May be correct but tell us Harsha: What the hell is the right value? No Mahinda dodge here please.
    .
    The depreciation of our currency is a fact of life. Are you preparing to lead us? If not why not.
    We believe that the Mahinda fix is anything but a band-aid. Do you agree or not?
    …………and when can we expect an answer? Surely not till the forthcoming election results

  • 1
    1

    when a politicians says te rupee has devalued over it’s fiar value, that is stupid. HArsha De silva ia not a genuine economic expert. He may have juse completed a PhD by Post gradeate degree which is available in the so-called economically and technologically developed countries. Even among accepted economists, the governor of the centrak bank is the one to announce that rupee is devalued too much and not a politician seekin reelection.

    • 1
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      I wanted to say a Degree by post and not post gradutate. Sorry for my poor english skills.

  • 2
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    If these guys are saying it is American currency increasing, then they need to explain why American currency is increasing, instead of dodging on that subject, too. None of these idiots should attempt to explain about American Dollar because it is the most complicated currency to predict or explain of its market behavior. It is connected to American local productivity and politics. It is connected to world total trade. It is connected to world tension and ease. Dollar will effect if Iran blocks oil movements through Persian Gulf. Dollar shows its adjustment when they put a trade embargo on Iran or Russia. Is LKR affected by any of these things other than local economic activity? These guys are real frauds, not ready to accept that Lankawe economy is going down and we are facing dwindling export and expanding imports of luxury items. They come out with concocted CB numbers and cheat everybody, including International Investors. CB is leading in telling untruth to people and setting example for all other governmental organizations.

    In fact the Sinhala mass is so Modaya, so none of the leaders (UNP, SLFP, Slap Party) say anything is truth. I had said 3 months ago that LKR will go to 200 Rs end of this year and more than 300 at the end of next. That has nothing to do with any calculation or estimate. It is only pure speculation based on the massive loans going to fall due on next two years. Like I did my speculation, speculation of traders is an embedded future in currency trading. One has to show a solid internal activity for a trader to buy massive amount of rupees, expecting it would appreciate. But what is going inside? Additional white elephants and Secret Solution. Who would believe these UNP crooks and burn their hands, other than Sinhala Buddhist Modayas and Sumanthiran.

  • 2
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    ow we see additional detriment created by UNP government, SLSFTA. Singapore is going to suck all the leftover rupees for the fancy imports of Sinhala elite Intellectuals, but no income at all for the country out of these imports. Is this the kind of free Tarde the Capital Market is advocating for a country like Lankawe, so battered by currency depreciation? The floated currency is not able to balance for 40 years. How the trade balance with Singapore is going to stabilize within 40 years? Can Harsha put somewhere how much going to be first import from Singapore and how much going to be the export to Singapore? UNP crooks are picking fire from the burning family house out of Singapore Free trade.
    They don’t have a penny, but when the New Year starts, they have to pay $400M. Almost a $3B is falling due sooner. The other game is they cut off from IMF and made arrangements with China for additional loans, pledging Northern Lands. Do you call this is what the capital market economic policy is. How they are going to stabilize the currency without IMF. Is that a joke or they are serious? Now India wants the North for it. Being upset by this double game, even Chinese Prime Minister came to Colombo and warned these guys of their abandoning China. What these stupid decisions are saying is Lankawe is going to face worse problem than Pakistan. The idiot PM is saying “Ooo it is nothing, even Pakistan is facing the same currency depreciation”.
    It sound like the Karma has come for the UNP to reap for the burning it did to Tamils properties in the South as by name of Pogroms, from 1958. If the currency collapses, only who deposited in the foreign Banks will escape & all others will be facing a Pogrom of property loss like Tamils are facing from 1948.

  • 2
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    In another news, Ranil explains how his dumb policies crashed the rupee. He developed the Sri LankanStock market for foreign companies. Now they are moving their investments back to the USA, their naturalized country. that is caused by TRUMP and the rupee crqshed. Sri lankan economy is service based (tourism, Casinos, Brothels) and not manufacturing based (Paranthan, Kankesan, Mathte gods, Poogoda, Oruwala, Sapugaskanda all are dead). So, Rupee only can crash and never goes up.

  • 1
    0

    There was a discussion in Parliament on this subject of “Rupee Falling”. Joining the discussion, the State Minister Mr. Eran Wickramaratne was saying that this “Falling Rupee” brings the much needed Foreign Exchange secured through a “RISE” in the prices of our “Exports”. He saw a “Silver Lining” in the “Dark Cloud”. What are our “Exports” and “How” much value that would add to our earnings, he did not specify. He also did not say what our Balance of Trade is at the moment. In his own opinion, will he tell us whether that “RISE” in the export value, with this “Silver Lining” in the “Dark Cloud” would be SUFFICIENT to meet our Debt Repayments that have to be payed in “Dollars” and meet, at least what portion of the Imports that are required for day to day consumption of the people. To curb the “Imports”, the Government has now ruled that all the Letters of Credits must be established by paying 100% of the value. Perhaps, that could be a good move, if that is applicable for “Luxuries” (non essentials). Yet, how that is going to help to bring down the prices of “Essentials” for the peoples’ consumption is not known, as all such imports too have to be paid in “Foreign Exchange” value. It is very disheartening to see a “State Minister” like Mr. Wickramaratne , on whom we had lot of faith, joining a discussion and camping with a large majority of “Idiots” who have been sent to Parliament. These types of “Ad Hock” and “Patch Work” are not the solution; but a very well PLANNED long term strategy based on FORWARD THINKING is a must ACTION needed from State Ministers like Dr. Harsha de Silva and Mr. Eran Wickramaratne. Will they stand up to that CHALLENGE?

  • 2
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    The little respect this guy had as a political ‘not totally a misfit’ is lost the more he opens his mouth. He seems to be drunk with ministerial perks. That usually happens for 6 yrs then they become sober and offer FUNtastic solutions to all the issues the running Govt faces !!

  • 1
    0

    Harsha says
    ” investors taking refuge in the US with escalating trade tensions with China. “

    FALSE

    Investors are leaving the US.
    Second-quarter 2018 foreign direct investment flows in the United States were in negative territory, resulting in a divestment of $8.2 billion, following a relatively strong first quarter. The second quarter was marked by unusually high selloff and purchase activity, which suggests that some $100 billion invested in the United States has transferred ownership abroad.

    https://www.zerohedge.com/news/2018-09-25/foreign-direct-investment-us-goes-negative-blame-trumps-trade-policy

  • 1
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    Economy of politics of UNP has denied Market Economy of Capitalism by advocated for Liberalization of OPEN system of OLD ORDER practices are by UNP Ranil Wicks. Result of that lost nation-capitalist planning of Economy. which ignore by RW and his gang. UNP leaders do not know Capitalism has own planning Economy system by its birth, origin and development. Most of current UNP thinking -tank are outdated.
    They blame and claim for which that ongoing currency devaluation of National of Rupee is that impact of external factors .
    The Harasha De Sliva and Ranil Wicks of hard core UNPs are in dark of ongoing globalization of nature of Capitalism take wrong side input reading.
    Indeed global value chain has created NEW unpersedant scale of commodity exchange of USE and EXCHANGE value market capitalism. It has New and Old market of labor and Capital since 1990 of New globalization These two factors depend on each other .Well currency factors key to depend on that chain of values by Production and mainly manufacture and services of GDP of Island . Rupee has gone down due to the result of declined GDP since 2014 7.3 % to 3.3% in 2018 .
    Rupee currency against US $ Dollar terms come to bad end due to weak Economy.
    UNP has not realized that devalued Rupee is that key INTERNAL FACTOR.?

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    Politics-economy-social policies are far-Right mindset by Ranil Wicks and his hard-core think-tank.. By daily increased all necessary and esstantail items has become route work of UNP hard -core that “call political governances” .
    By the purposed of moral boosting of public in that political platform advocated by RW & UNP leadership and their coalition partners, misguided millions of voters. By new policy UNP that External factor of Rupee devalue has blame to Donald Trump US administration, by RW.

    They ( RW, CBK & MS) call that is part play by for to be created unique “vision of 2025′ guided line which under that political strategy of brain child work of Ranil Wicks…..intelligence output?
    While blaming every ILLS ongoing crisis thing for past that “Rule of Rajapakese family” related matter ! @

    It has come to common political allegation against MR previous rule by UNP leader of Ranil Wicks which is that inside and outside Parliament .
    Harashed De Sliva and RW telling to publicly that including IMF and WB that total debt have to pay to Rs. 4000 Million of Rupees for DEBT Installment coming years.
    According to “orthodox Christen of good governance” of UNP- RW has that one and only that problem remain which is that crisis is that devalued “rupee” ?
    What is that remain issue that the repayment debt burden!

    No any other of economic crisis remain in our soil that except re-payment of Debt Burden ?
    The man of RW of UNP by analysis of crisis of the political-economic and Social phomnnomone which are that roots goes back to the an interpretation by blaming Trump is external factor and MR is internal factor?

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    Stop 2.5 billion US D consuming useless Kalani Vally Elevated passenger Railway project.

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