UNP raises concerns over rupee depreciation, questions govt’s economic approach

The United National Party (UNP) has raised concerns over what it described as the “uncontrolled depreciation” of the Sri Lankan rupee, questioning the government’s economic approach and warning of rising pressure on the public due to the increasing cost of living.

In a statement, the UNP claimed that during the 20 months since the current government assumed office, it has overseen the currency depreciate from Rs. 292 against the US dollar at the time former President Ranil Wickremesinghe handed over power to Rs. 354 at present.

The party alleged that the depreciation was largely due to the government’s failure to continue the economic programme initiated by the former President, adding that the absence of a clear economic plan and the failure to boost foreign reserves had contributed to the rapid rise in the value of the US dollar.

The UNP also referred to concerns expressed by the private sector that the Sri Lankan rupee could continue to depreciate in the face of mounting pressure both domestically and internationally.

The statement further noted that although certain export industries may benefit from a weaker currency, ordinary citizens and employees would face increased economic hardship due to the rising cost of living.

“While certain export industries will enjoy higher dividends due to the depreciated currency, the employees and the general public will suffer due to a rising cost of living.”

Commenting on the export sector, the party stated that while industries such as apparel are predicting increased exports, they have failed to account for shrinking international markets.

“The European markets are facing growing pressure and will explore options to curb their imports,” the statement said, adding that the United States under President Donald Trump is currently prioritising to ensure Iran does not obtain a nuclear weapon and the economy is not their focus right now. 

The UNP further pointed to uncertainty over Freedom of Navigation, including closures of the Strait of Hormuz and attacks in the Red Sea, stating that shipping costs are expected to continue rising and that the situation does not present a positive picture for Sri Lanka’s export industry.

“Minister Anil Jayantha has encouraged organisations to present the depreciating currency in a positive light. While many organisations have chosen to remain silent, the Joint Apparel Association Forum has echoed the sentiments of the Minister, claiming that a depreciating currency is a positive sign for the industry,” the statement said. 

The statement highlighted the historical role played by the UNP in establishing and expanding Sri Lanka’s apparel industry under former Presidents J. R. Jayewardene and Ranasinghe Premadasa.

“It is disappointing that today the industry has chosen to echo the sentiment of the Minister and the Government, focusing on increasing dividends, while ignoring the growing hardships faced by the general public,” the statement added.

The UNP also urged exporters to look beyond increasing dividends and ensure that the burden of the growing economic hardship is not passed on to their employees.