The Hon. (Dr.) Anil Jayantha

¶ 01 Yes, funds have gone. If there’s a regulation violation, we can act only within the legal framework and Gazette — re-export where required. If challenged in court, we will abide by outcomes.

¶ 02 On another matter: “money printing.” There has been repeated misinterpretation. Money printing is not the physical printing of notes; it is the increase in reserve money. At the time we took office, both reserve money and broad money have increased by June 2025, but reserve money rose only by LKR 137 billion. The Central Bank purchased USD 1.74 billion from the market, injecting about LKR 522 billion, and the Government drew LKR 76 billion from the Central Bank. Through open market operations, liquidity was sterilized, leaving a net reserve money increase of LKR 137 billion.

¶ 03 What some cite — LKR 1.227 trillion — is the increase in broad money, not reserve money. Broad money rose due to the modest reserve money increase and higher velocity as the private sector’s credit demand improved. If there had been excessive monetary financing, inflation would have surged. Instead, inflation has been brought under control, near zero or negative. We have refrained from monetary financing of deficits; unlike in the past when excessive Treasury Bills/Bonds issuance escalated rates and inflation to 70–80%. Our 2025 borrowing limit is capped at LKR 4,000 billion; the fiscal deficit is LKR 2,200 billion, financed through market borrowing rather than central bank financing. This supports stability and growth.

¶ 04 Thank you.

¶ 05 Question proposed.