Former UNP Deputy Leader MP Ravi Karunanayake has warned that Sri Lanka’s efforts to increase foreign reserves to US$7.2 billion by December under the IMF’s Extended Fund Facility (EFF) could place a heavy burden on households and small businesses.
Speaking in Parliament, he noted that official reserves stood at US$6.1 billion by the end of August, meaning an additional US$1.1 billion is needed within four months. Karunanayake questioned the feasibility and sustainability of reaching the target.
He urged the Finance Minister to clarify whether the reserves would be bolstered through real inflows such as exports, tourism, remittances, and foreign direct investment, or through speculative measures like short-term borrowing and currency swaps, which could create a misleading “illusion of reserves.”
The MP warned that temporary monetary measures to meet the target could raise interest rates, restrict credit to small and medium-sized enterprises, and add further pressure on families already grappling with high living costs. He emphasized that Parliament should be assured that the reserve target reflects a genuine path to economic recovery rather than merely satisfying external lenders.
