Dr. Harsha de Silva

Main Opposition Samagi Jana Balawegaya (SJB) Parliamentarian Dr. Harsha de Silva over the weekend faulted the Government for maligning an independent and world reputed institution such as Moody’s whilst warning

hardships are piling on people due to the current regime’s sheer mismanagement of the economy. 

“Government is on a foolish stance that what it says is right and what others such as Moody’s are all lies,” the SJB MP said in reference to the Finance Ministry and the Central Bank jointly opposing and refuting Moody’s downgrading of Sri Lanka Sovereign rating Caa2 from Caa1 last Thursday. 

The decision to downgrade the ratings is driven by Moody’s assessment that the absence of comprehensive financing to meet the Government’s forthcoming significant maturities, in the context of very low foreign exchange reserves, raises default risks. 

In turn, this assessment reflects governance weaknesses in the ability of the country’s institutions to take measures that decisively mitigate significant and urgent risks to the balance of payments.

Expressing its strong displeasure, the Government said Moody's action was ill-timed, irrational and unacceptable whilst the move renews concerns over subjectivity. Government said Moody's move reflected its serious governance weaknesses where it systematically overlooked the positive developments and expectations in emerging market economies, but attributes much greater weight to downside risks.

Dr. de Silva however said Moody’s downgrade confirms it had no confidence in the Central Bank’s recently unveiled short-term roadmap whilst recent utterances by Government ministers as well as  fresh developments prove the foreign exchange and economic serious crisis has worsened. 

According to SJB MP, in the next 12 months, Sri Lanka’s Government and private sector foreign debt repayment requirement is $ 7.2 billion of which the sovereign is responsible for around $ 4.5-5 billion. 

“Though the Central Bank listed various short-term measures to shore up foreign reserves, there have been contradictory developments,” he said.  It was pointed out that Oman Government has denied it was to extend $ 3.6 billion credit line despite claims to that effect by Energy Minister Udaya Gammanpila. “This means country will not have funds to import fuel,” SJB MP claimed. 

“On the other hand, the Government’s coalition parties want the $ 250 million deal on Yugadanewi and US firm New Fortress suspended whereas CBSL Governor has listed it as part of proceeds that will boost reserves,” said Dr. de Silva adding that trade unions of CEB have threatened a blackout in protest. 

Apart from the forex crisis, he also said rice prices have gone up again with Samba kilo at Rs. 160 and Keeri Samba at Rs. 220. 

“Cost of living is soaring to unbearable levels and people are becoming totally destitute. An economic pandemic is looming apart from the COVID-19. People voted Gotabaya Rajapaksa and the Government not to destroy country or the economy. He and the Government must immediately take corrective action to ease the burden on people and avert the economic pandemic” Dr. De Silva emphasised.

Harsha faults Govt. for maligning Moody’s; warns hardships piling on people