Former United National Party (UNP) Deputy Leader and Member of Parliament Ravi Karunanayake has called for a reassessment of Sri Lanka’s current monetary policy framework, arguing that it is essential to safeguard the purchasing power of the people and preserve the value of the rupee.
In a letter addressed to President Anura Kumara Dissanayake, Karunanayake said that while maintaining a 5 percent inflation target may have been appropriate in the aftermath of the country’s economic crisis, the current economic environment warrants a comprehensive review of the existing framework.
He pointed to the challenges Sri Lanka has faced in recent years, including sovereign debt default, exchange rate instability, balance of payments pressures, and the erosion of household purchasing power, as reasons for revisiting the country’s monetary policy objectives.
According to the MP, protecting the purchasing power of citizens and maintaining the value of the national currency should not be viewed merely as technical monetary policy goals but as fundamental pillars of the country’s broader economic and social policy.
Karunanayake also cautioned that Sri Lanka faces the risk of stagflation—a situation characterized by slowing economic growth alongside persistent inflationary pressures.
He noted that although macroeconomic conditions have improved compared to the height of the economic crisis, private sector investment remains subdued.
The MP further observed that industrial production continues to operate below capacity, credit growth remains constrained, and household purchasing power is still under pressure, while inflationary pressures persist despite relatively weak domestic demand.
He stressed that these challenges highlight the need for a monetary policy framework that supports both price stability and sustainable economic growth.
