Finance and Media Minister Mangala Samaraweera yesterday said that former President Mahinda Rajapaksa who was also the country’s Finance Minister has completely forgotten that the rupee had depreciated against dollar by 14 per cent in 2012.
“He could not event control the depreciation of rupee even after pumping US$ 4.1 billion foreign reserves”,” Minister Samaraweera added.
“The value of rupee against the dollar saw unprecedented decline in 2012 under the rule of former Finance Minister and present Kurunegala District Parliamentarian Mahinda Rajapaksa,” he said.
“Sri Lanka will plunge into a debt crisis, if the country’s foreign reserves are used to prevent the depreciation of the rupee against the dollar.
He said that the Rajapaksa government has left the government with a legacy of massive debt running into billions and the country’s foreign reserve is used to repay these debts.
The Finance and Media Minister was responding to various statements made by opposition Parliamentarians including former President Mahinda Rajapaksa over the depreciation of the rupee against the dollar.
“We have over US$ 8 billion in Foreign Reserves. This money was used sparingly as the government has to repay massive loans obtained by the previous government,” Minister Samaraweera said.
Samaraweera added that the present government has to pay Rs. 1.9 trillion this year as loan installments.
“We have to repay another Rs. 4.1 trillion within next for years too,” he added
The Minister added that the country will plunge into an economic crisis as experienced in Greece and Argentina, if foreign reserves are used to control depreciation of the local currency against the dollar without repaying the debts.
“Many developing countries are faced with the challenge of depreciation of their local currency against the dollar with the increase of interest rates of US banks,” he said.
“India, Indonesia, Russia, Australia, and the Philippines are experiencing the depreciation of their local currency against dollar due to massive development in the US market,” he said.
“Many investors who made investments in other countries with the onset of the banking crisis in the US in 2008, have started pulling out their money from these countries and investing in US banks for better returns. “This situation has strengthened the dollar,” Minister Samaraweera said.