Sri Lanka gives Rs13.3bn to poor with World Bank credit after soft-peg collapse

ECONOMYNEXT – Sri Lanka will provide rupees to 3.34 million households in the Samurdhi relief scheme, and other groups on income support from a World Bank credit, Trade Minister Shehan Semasinghe said as a soft-peg with the US dollar collapsed after money printed out boost growth (output gap targeting).

Payments between 5,000 to 7,500 rupees would go to most recipients under the income support scheme and those on waiting list for three months.

Media Minister Nalaka Godahewa said the money would not be printed.

The money would come from a 167 million US dollar credit from the World Bank, Minister Semasinghe said.

Sri Lanka has operated an unstable intermediate exchange rate regime under which Keynesian economists print money to boost growth (output gap targeting), triggering depreciation, high inflation and social unrest. (Colombo/May04/2022)