{"id":239975,"date":"2024-11-27T09:10:57","date_gmt":"2024-11-27T03:40:57","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=239975"},"modified":"2024-12-05T22:03:45","modified_gmt":"2024-12-05T16:33:45","slug":"no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/","title":{"rendered":"\u201cNo Chance Even For A Simple Mistake\u201d President Says, But Officials Are Ready To Make Big Ones"},"content":{"rendered":"

By Hema Senanayake<\/a> –<\/strong><\/span><\/p>\n

\"\"

Hema Senanayake<\/p><\/div>\n

President Anura Kumara Dissanayake<\/a><\/span> at the Inauguration of the First Session of the Tenth Parliament delivering a speech, said that the NPP government must go with the IMF framework and the previous administration’s debt restructuring agreements as they have been endorsed by the IMF. It is true. Renegotiating for a new Debt Sustainability Analysis (DSA) is now dead. That is good, because we must end this process as early as possible to enter a new beginning. If the Net Present Value analysis proves beneficial for us to ensure debt sustainability even under the macro-linked bond mechanism we must finish this process. The NPP government is going to do it possibly by the end of December this year. It is a great consolation.<\/p>\n

So, the president very correctly insisted that there is no chance even for a simple mistake. But the government is heading to make a serious mistake unintentionally in another area by lifting the ban on vehicle imports from February 01, 2025. The objective is clear – import vehicles, collect import tariffs to pay the increased salaries and other financial concessions promised. This was Ranil\u2019s formula and now the same is sold to NPP government openly by the governor of the central bank. The possible negative outcome is the outflow of massive amounts of foreign exchange by this single act, destabilizing the domestic currency. As far as I know, the central bank will not intervene in the forex market to stabilize the rupee, because the IMF\u2019s prescription is to allow the rupee to find its natural exchange value based on demand and supply. This natural exchange value of rupee could easily touch Rs. 400 for one U.S. dollar. I am not arguing to keep the vehicle import restrictions for a long time, instead I argue that lifting the ban should not be linked to find essential revenue for the government to pay for increased salaries and provide other financial incentives promised to various people.<\/p>\n

The central bank might be pointing out to the government that there is a mild deflation which could be temporary, but also shows slow-down economic activity. Such a situation requires the system to inflate as the central bank\u2019s target rate of inflation is 3 to 5%. In this kind of situation, a recently popular policy tool is to use Quantitative Easing to push the demand up. This option is not available to Sri Lanka under the new Central Bank Act as the central bank cannot expand its balance sheet to support government\u2019s Quantitative Easing plans. So, the central bank can let the currency depreciate to inflate the system, and removing the ban on vehicle imports is one mechanism to do it. The silliest strategy ever.<\/p>\n

However, a few alterative strategic measures can be sorted out if Deputy Finance Minister Dr. Harshana Sooriyapperuma brainstorms a few questions with Dr. Nandalal and Mahinda Siriwardena and other economists. I will list them as follows.<\/p>\n

1. Can the country build up part of reserves without increasing market liquidity? Usually, the central bank purchases dollars to build up reserves from the market by increasing rupee liquidity in the market.<\/p>\n

2. \u2060Can the country employ Quantitative Easing by creating new money subject to a monetary rule (e.g.1% of GDP) under the watch of the IMF?<\/p>\n

3. \u2060Can the money created under 2 above support to maintain the inflation target of 3 to 5%?<\/p>\n

4. \u2060 will the new money created under 2 above is sufficient to pay reasonable salary increase and provide other financial concessions promised by the government?<\/p>\n

5. Will the increased salary in turn bring additional PAYE tax revenue?<\/p>\n

6. \u2060As per the above 4, can the government allow import of vehicles as a stand-alone decision meaning that the imports can be restricted via macroprudential tools without jeopardizing government revenue targets ?<\/p>\n

7. \u2060Will the new money created by Quantitative Easing reduce borrowing and reduce interest payments?<\/p>\n

I was happy about the NPP government\u2019s decision to keep Dr. Nandalal and Mahinda Siriwardena as they are capable of bringing in new strategies if the NPP government asks right questions. Can the Deputy Minister of Finance get answers to the above seven questions from the central bank and from the Treasury.<\/p>\n","protected":false},"excerpt":{"rendered":"

[…]<\/p>\n","protected":false},"author":106,"featured_media":239220,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,46,8],"tags":[],"class_list":["post-239975","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-colombotelegraph","category-constitutional-reforms","category-editorial"],"yoast_head":"\n\u201cNo Chance Even For A Simple Mistake\u201d President Says, But Officials Are Ready To Make Big Ones - Colombo Telegraph<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"\u201cNo Chance Even For A Simple Mistake\u201d President Says, But Officials Are Ready To Make Big Ones - Colombo Telegraph\" \/>\n<meta property=\"og:description\" content=\"[…]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/\" \/>\n<meta property=\"og:site_name\" content=\"Colombo Telegraph\" \/>\n<meta property=\"article:published_time\" content=\"2024-11-27T03:40:57+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-12-05T16:33:45+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2024\/10\/Anura-kumara-dissanayake-IMF.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"900\" \/>\n\t<meta property=\"og:image:height\" content=\"510\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Hema Senanayake\u00a0 \u00a0 \u00a0 \u00a0\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Hema Senanayake\u00a0 \u00a0 \u00a0 \u00a0\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/\",\"url\":\"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/\",\"name\":\"\u201cNo Chance Even For A Simple Mistake\u201d President Says, But Officials Are Ready To Make Big Ones - Colombo Telegraph\",\"isPartOf\":{\"@id\":\"https:\/\/www.colombotelegraph.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2024\/10\/Anura-kumara-dissanayake-IMF.jpeg\",\"datePublished\":\"2024-11-27T03:40:57+00:00\",\"dateModified\":\"2024-12-05T16:33:45+00:00\",\"author\":{\"@id\":\"https:\/\/www.colombotelegraph.com\/#\/schema\/person\/e0201eb2a4bbbc1e41f5530a47e53531\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/#primaryimage\",\"url\":\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2024\/10\/Anura-kumara-dissanayake-IMF.jpeg\",\"contentUrl\":\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2024\/10\/Anura-kumara-dissanayake-IMF.jpeg\",\"width\":900,\"height\":510},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.colombotelegraph.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"\u201cNo Chance Even For A Simple Mistake\u201d President Says, But Officials Are Ready To Make Big Ones\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.colombotelegraph.com\/#website\",\"url\":\"https:\/\/www.colombotelegraph.com\/\",\"name\":\"Colombo Telegraph\",\"description\":\"In journalism truth is a process\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.colombotelegraph.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.colombotelegraph.com\/#\/schema\/person\/e0201eb2a4bbbc1e41f5530a47e53531\",\"name\":\"Hema Senanayake\u00a0 \u00a0 \u00a0 \u00a0\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.colombotelegraph.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/22f6c9799aebbf506fa83ed403607bdf2504f2b99464e5c18c4048173f914c98?s=96&d=identicon&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/22f6c9799aebbf506fa83ed403607bdf2504f2b99464e5c18c4048173f914c98?s=96&d=identicon&r=g\",\"caption\":\"Hema Senanayake\u00a0 \u00a0 \u00a0 \u00a0\"},\"url\":\"https:\/\/www.colombotelegraph.com\/index.php\/author\/hemas\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"\u201cNo Chance Even For A Simple Mistake\u201d President Says, But Officials Are Ready To Make Big Ones - Colombo Telegraph","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/","og_locale":"en_US","og_type":"article","og_title":"\u201cNo Chance Even For A Simple Mistake\u201d President Says, But Officials Are Ready To Make Big Ones - Colombo Telegraph","og_description":"[…]","og_url":"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/","og_site_name":"Colombo Telegraph","article_published_time":"2024-11-27T03:40:57+00:00","article_modified_time":"2024-12-05T16:33:45+00:00","og_image":[{"width":900,"height":510,"url":"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2024\/10\/Anura-kumara-dissanayake-IMF.jpeg","type":"image\/jpeg"}],"author":"Hema Senanayake\u00a0 \u00a0 \u00a0 \u00a0","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Hema Senanayake\u00a0 \u00a0 \u00a0 \u00a0","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/","url":"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/","name":"\u201cNo Chance Even For A Simple Mistake\u201d President Says, But Officials Are Ready To Make Big Ones - Colombo Telegraph","isPartOf":{"@id":"https:\/\/www.colombotelegraph.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/#primaryimage"},"image":{"@id":"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/#primaryimage"},"thumbnailUrl":"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2024\/10\/Anura-kumara-dissanayake-IMF.jpeg","datePublished":"2024-11-27T03:40:57+00:00","dateModified":"2024-12-05T16:33:45+00:00","author":{"@id":"https:\/\/www.colombotelegraph.com\/#\/schema\/person\/e0201eb2a4bbbc1e41f5530a47e53531"},"breadcrumb":{"@id":"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/#primaryimage","url":"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2024\/10\/Anura-kumara-dissanayake-IMF.jpeg","contentUrl":"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2024\/10\/Anura-kumara-dissanayake-IMF.jpeg","width":900,"height":510},{"@type":"BreadcrumbList","@id":"https:\/\/www.colombotelegraph.com\/index.php\/no-chance-even-for-a-simple-mistake-president-says-but-officials-are-ready-to-make-big-ones\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.colombotelegraph.com\/"},{"@type":"ListItem","position":2,"name":"\u201cNo Chance Even For A Simple Mistake\u201d President Says, But Officials Are Ready To Make Big Ones"}]},{"@type":"WebSite","@id":"https:\/\/www.colombotelegraph.com\/#website","url":"https:\/\/www.colombotelegraph.com\/","name":"Colombo Telegraph","description":"In journalism truth is a process","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.colombotelegraph.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.colombotelegraph.com\/#\/schema\/person\/e0201eb2a4bbbc1e41f5530a47e53531","name":"Hema Senanayake\u00a0 \u00a0 \u00a0 \u00a0","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.colombotelegraph.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/22f6c9799aebbf506fa83ed403607bdf2504f2b99464e5c18c4048173f914c98?s=96&d=identicon&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/22f6c9799aebbf506fa83ed403607bdf2504f2b99464e5c18c4048173f914c98?s=96&d=identicon&r=g","caption":"Hema Senanayake\u00a0 \u00a0 \u00a0 \u00a0"},"url":"https:\/\/www.colombotelegraph.com\/index.php\/author\/hemas\/"}]}},"jetpack_featured_media_url":"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2024\/10\/Anura-kumara-dissanayake-IMF.jpeg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.colombotelegraph.com\/index.php\/wp-json\/wp\/v2\/posts\/239975","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.colombotelegraph.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.colombotelegraph.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.colombotelegraph.com\/index.php\/wp-json\/wp\/v2\/users\/106"}],"replies":[{"embeddable":true,"href":"https:\/\/www.colombotelegraph.com\/index.php\/wp-json\/wp\/v2\/comments?post=239975"}],"version-history":[{"count":2,"href":"https:\/\/www.colombotelegraph.com\/index.php\/wp-json\/wp\/v2\/posts\/239975\/revisions"}],"predecessor-version":[{"id":240075,"href":"https:\/\/www.colombotelegraph.com\/index.php\/wp-json\/wp\/v2\/posts\/239975\/revisions\/240075"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.colombotelegraph.com\/index.php\/wp-json\/wp\/v2\/media\/239220"}],"wp:attachment":[{"href":"https:\/\/www.colombotelegraph.com\/index.php\/wp-json\/wp\/v2\/media?parent=239975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.colombotelegraph.com\/index.php\/wp-json\/wp\/v2\/categories?post=239975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.colombotelegraph.com\/index.php\/wp-json\/wp\/v2\/tags?post=239975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}