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The International Monetary Fund (IMF) has warned Sri Lanka about a slowdown in the accumulation of foreign reserves, highlighting the significance of strengthening external buffers. In May 2023, Sri Lanka began printing money to promote business by pumping artificial rupee reserves into banks. However, this resulted in currency depreciation and exacerbated currency volatility. The central bank responded by lowering reserve ratios and selling securities. Analysts are concerned that these efforts, motivated by IMF aims, would weaken monetary stability and annoy the people. The net reserves of Sri Lanka's central bank have become negative, needing remedial action. This issue exposes tensions between policy objectives.
https://economynext.com/imf-warns-sri-lanka-on-slowing-reserve-collections-money-printing-133066/
