The Central Bank of Sri Lanka's Controversial Decision on Banknote Demonetization in June 2024

-By A Special Correspondent

(Lanka-e-News -03.Jan.2024, 11.00 PM) In a surprising move that sent shockwaves through the nation's financial sector, the Central Bank of Sri Lanka (CBSL) announced its decision to demonetize certain banknotes in June 2024. The decision, cloaked in secrecy and revealed only to a select few, has raised eyebrows and sparked speculation about the motives behind this unprecedented move.

Preparation and Announcement: A Monopoly in Action

The CBSL, established as the sole authority for issuing currency notes and coins in Sri Lanka by the Central Bank of Sri Lanka Act, No. 16 of 2023, exercised its power to bring about a radical change in the country's monetary landscape. While demonetization is not unheard of globally, the lack of public consultation and transparency surrounding the decision has left citizens and businesses perplexed.

Sources within the CBSL reveal that the planning for this move began months before the official announcement. The CBSL of India, a close neighbor, initiated preparations for new banknotes and finalized the design in August 2023. The printing of these new banknotes is set to commence in March. This proactive approach raises questions about the motives and considerations that influenced the decision-making process at the CBSL.

The CBSL's decision to introduce new banknotes prompts concerns about the logistical challenges the nation will face in replacing the existing currency. The sudden shift could potentially disrupt economic activities, leading to confusion and uncertainty among businesses and the general public.

Information Leak: A Breach of Trust

One of the most troubling aspects of this entire episode is the leak of information prior to the official announcement. Several officials within the Finance Ministry allegedly shared details of the demonetization plan with a select group of business leaders. This privileged information has allowed these individuals to make strategic moves, converting their local currencies into foreign assets, thereby safeguarding their financial interests.

The leak raises serious ethical questions about the integrity of the decision-making process within the CBSL. The selective disclosure of such crucial information suggests a lack of accountability and transparency, leaving room for powerful elites to exploit the situation to their advantage. This incident has fueled public distrust in the government's ability to manage economic policies without succumbing to cronyism.

Black Money Purge or Currency Crisis?

The official justification provided by the CBSL for the demonetization is to purge black money from the economy. While this goal is noble and aligns with international efforts to combat illicit financial activities, the lack of a comprehensive plan and public communication has left citizens skeptical.

The move to demonetize appears rushed, raising concerns about its potential impact on the broader economy. Critics argue that the CBSL has not adequately considered the consequences of such a drastic step, particularly on businesses, daily wage earners, and the informal sector, which heavily relies on cash transactions.

Furthermore, the demonetization decision seems to have created a paradox where the very secrecy meant to curb black money has inadvertently allowed a select few to exploit their insider knowledge, converting their assets before the public announcement. This raises questions about the sincerity of the CBSL's commitment to combating corruption and promoting financial integrity.

President Ranil's Alleged Involvement: A Friend's Whisper

Rumors circulating within political circles suggest that President Ranil was privy to the demonetization decision before it was officially announced. Sources claim that the president may have shared this information with a close circle of friends, enabling them to position themselves advantageously in anticipation of the currency change.

While these allegations are yet to be substantiated, they add another layer of complexity to an already controversial situation. If proven true, it would underscore the need for a thorough investigation into the decision-making process and the role of political figures in influencing monetary policies.

In conclusion, the CBSL's decision on banknote demonetization in June 2023 has sent shockwaves across the nation, prompting questions about the motives, transparency, and unintended consequences of such a bold move. The leak of information to select individuals raises serious concerns about fairness and equity in economic policy, while rumors of presidential involvement add a political dimension to an already contentious issue. As Sri Lanka braces itself for a new era of currency, the nation awaits answers from its central bank and political leaders regarding the true motivations behind this controversial decision.

-By A Special Correspondent

by     (2024-01-03 18:45:04)

We are unable to continue LeN without your kind donation.

Leave a Reply

  0 discussion on this news

News Categories


    Defence News


    Ethnic Issue in Sri Lanka


    Fine Art

    General News

    Media Suppression