The main reasons for Sri Lanka’s economic bankruptcy and the administrative weaknesses behind it are the main reasons and the authorities had taken steps to hide the country’s real financial situation from Parliament and the President, says Central Bank Governor Dr. Nandalal Weerasinghe. He said this while participating in a discussion on an online channel.
He revealed that when he assumed the post of Central Bank Governor, the true information about the country’s financial situation was hidden even from the then President.
”I assumed the post of Central Bank Governor on April 8, 2022. At that time, Sri Lanka’s foreign exchange reserves had fallen to an extremely low level of US $ 25 million. But in May, $ 6 billion in loan installments were to be paid,” he said.
The Central Bank Governor said that the Central Bank Governors and Finance Ministers who preceded him had not reported the real situation of the country to the President or Parliament, and that they had said that the debt could be paid without any problems. The Central Bank Governor stated that the country’s economy was in serious danger due to the concealment of the real financial situation in the country.
Although his decision to temporarily suspend debt payments was criticized by the opposition, Dr. Nandalal Weerasinghe says that it was the only option to prevent the country from completely collapsing.
”The decision not to pay the debt was taken after informing the creditors. If it had not been done then, the country could have entered a ‘Hard Default’ situation and been completely isolated from the international financial system. It was taken after the approval of the Cabinet and informing Parliament. It was not my decision alone.
The previous authorities tried to pay the debt by concealing the real economic situation of the country, and the country lost even the money it had to import essential food, medicines and fuel. “The country has reached a certain level of stability today because of correcting those mistakes and acting with transparency,” said Central Bank Governor Dr. Nandalal Weerasinghe.