• Banking sector is in a crisis because of interbank SWAPs

By Yohan Perera 

One should be thankful to Minister Udaya Gammanpila for telling the truth about Sri Lanka’s economy as he had openly stated that the County’s banking sector is in a crisis, SJB MP Harsha de Silva said yesterday.  

“Minister Gammanpila had openly stated that the banking sector would go in for a crisis if the fuel prices were not increased. We are thankful to him for speaking the truth,” Dr. de Silva told a press conference. 

“Banking sector is in a crisis because of interbank SWAPs. This happens when a state Bank purchases dollars from another bank.  A state bank could purchase a dollar at 199.90 which is the rate on which a dollar is being sold though it is more than Rs 200 in the open market. The bank which purchases a dollar at Rs 199.90 then gets into an agreement with the other bank to sell dollars at a lower rate. There have been interbank SWAPs worth 500 million dollars during the last two months,” he said. 

“In addition to this a high ranking government officer has said Sri Lanka will be forced to go for unsolicited loans soon. This means Sri Lanka will be forced to borrow black money from certain parties and countries at lower interest rates,” he added. 

“Also Sri Lanka’s foreign reserves are slated to be 1250 million dollars by the end of the year. Sri Lanka’s monthly export bill is approximately 1,600 million dollars. How are we going to manage this situation?” he questioned.