The Hon. (Ms.) Lakmali Hemachandra, Attorney-at-Law

¶ 01 Madam Deputy Chairperson of Committees, the Opposition has been accusing the Government of money printing. The Central Bank of Sri Lanka (CBSL) has clarified this, as reported in the Daily Mirror. Under the 2023 Central Bank of Sri Lanka Act, monetary financing—printing money to purchase Treasury Bills/Bonds to finance the budget—has been legally prohibited. An independent Central Bank was created—not by us, but by the then government under IMF guidance. Members who voted for that law now ask otherwise here.

¶ 02 Treasury does what Treasury must; the Central Bank does what it must. Money printing is a Central Bank function (if at all), not a Treasury function. The CBSL has clearly stated that the increase in money in circulation has not been due to money printing but due to expanded private sector credit by commercial banks, reflecting economic expansion. Interest rates have been brought down sustainably, encouraging lending and growth.

¶ 03 The Opposition keeps claiming Rs. 1.2 trillion was printed. CBSL has rejected this and clarified that from October 2024 to June 2025 there has been no such monetary financing by the CBSL. Some cite broad money supply growth posted by an organization—the Center for Human Rights and Research—and equate it to money printing. The CBSL assessed that this organization lacks understanding of what money printing is.

¶ 04 Remember 2020–2022: any monetary financing then was during the pandemic when the economy contracted, to maintain circulation and fund government when economic activity was not expanding—qualitatively different from today’s expansion. Now, with lower interest rates, expanded private credit, and economic recovery, the growth in money is from real activity, not printing. Criticize, but do so with facts—not by creating myths that “the economy is collapsing.” Thank you.