Former United National Party Deputy Leader MP Ravi Karunanayake says a country carrying a high debt burden cannot afford continued depreciation of its currency, warning that further weakening of the rupee could significantly worsen Sri Lanka’s financial position.
Speaking to the media on issues relating to foreign debt restructuring and economic management, the MP explained that foreign currency-denominated debt automatically increases in rupee terms whenever the local currency depreciates.
Karunanayake pointed out that although a one-rupee movement in the exchange rate may appear small in isolation, its impact becomes significant when applied to Sri Lanka’s total foreign debt stock.
According to the MP, even a one-rupee depreciation against the US dollar could add approximately Rs. 38 billion to the country’s debt burden.
He argued that for an economy already facing substantial debt obligations, continued depreciation of the rupee creates additional pressure on public finances and increases the overall cost of servicing foreign debt.
The MP further stated that prolonged currency weakness could have wider implications for economic stability, government expenditure, and the financial burden ultimately borne by citizens.
His comments come amid ongoing discussions on exchange rate movements, foreign debt restructuring, and the broader impact of monetary policy decisions on Sri Lanka’s economic recovery.
