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Sri Lanka to give US$5 grocery relief pack amid money printing

ECONOMYNEXT – A state-run retail chain under Sri Lanka’s Trade Ministry is giving a discounted grocery pack and a face mask for Coronavirus valued at 1,000 rupees (5 US dollars) in the run up to a traditional New Year as the rupee has hit 200 to the US dollar amid unprecedented money printing.

The ‘Sathosa Sahana Malla’ (relief) by state-run Lak Sathosa retail chain has 12 ‘essential’ items and is available from April 01.

Trade Minister Bandula Gunawardena told reporters the relief bag contained 1 kilogram of of white raw rice, 1 kilo of red raw rice, 1 kilo of Nadu rice, 1 kilo of white sugar, 1 kilo of red dhal, 1 kilo of wheat flour, 1 packet of salt, 250 grams of sprats, 1 packet of chillie peppers, 1 packet of soy meat, 1 packet of tea powder and a face mask for Coronavirus protection.

Minister Gunewardene said despite a global epidemic, the administration has taken all possible measures to safeguard the public and to provide maximum relief to the consumer despite rising global commodity prices.

He said that there will be no increase in the prices of goods during the upcoming traditional New Year and measures have been taken to provide such a relief package at a time when the cost of living of the people has gone up.

The current administration had made interest rates single digits he said.

For over 70 years Sri Lanka has changed taxes and promoted un-exportable ‘import substitution’ at high prices after printing money to keep interest rates down, depreciating the currency and running balance of payments deficit, instead of restraining the central bank and curtailing its powers to inject liquidity to the banking system, critics have said.

In 2020 Sri Lanka printed around 650 billion rupees measured by the rise in central bank’s Treasury bill stock and not counting cuts in the reserve ratio, and ran a 2.3 billion US dollar balance of payments deficit. In 2021 up to April about 115 billion rupees had been printed.

Lak Sathosa was able to give the items at a lower price after it started to buy goods under forward agreements, Minister Gunewardene said.

Although there is a problem with coconut oil, the Coconut Cultivation Board and the Livestock Development Board are also producing and releasing coconut oil to the local market he said. (Colombo/Apr02/2021)

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