SL Foreign Reserves: $6.2 Bn Safety Claim Challenged ⚠️

A sharp divergence has emerged between the President's assurance of economic safety and data reviewed by the Committee on Public Finance (CoPF). • President cited US$ 6.2 Bn in foreign reserves in the 2026 Budget as evidence of Sri Lanka's ability to meet external debt obligations. • CoPF Chairman Dr. Harsha de Silva questioned the figure, noting that when excluding non-usable components (per an IMF formula), reserves may be in negative territory. • The US$ 6.2 Bn total is reported to include components not fully available for debt repayment: • Short-term dollar borrowings ("hot money") from local banks. • Non-usable currency swaps from India and China. • CBSL Governor Dr. Nandalal Weerasinghe stated that IMF reserve "targets" are merely "estimates" and are now considered too high, citing increased market confidence in the economy. • Concerns were raised over the risk of another debt restructuring, a possibility warned against by the Opposition Leader, Sajith Premadasa, which historically resulted in severe costs to citizens (e.g., EPF/ETF). • The use of unused trillions in government coffers was questioned, with some suggesting the funds are being held back from development to improve foreign borrowing rates. • The debate highlights renewed concerns over Parliamentary financial oversight, which was bypassed prior to the 2022 default.