Sri Lanka’s CPC accumulated losses top trillion rupees on soft-peg

Sri Lanka’s state-run Ceylon Petroleum Corporation has lost 633 billion rupees up to August 2022 with 546 billion rupees coming from central bank actions, official data show.

The CPC made a forex loss of 546 billion rupees as the central bank printed money and the rupee collapsed from 200 to 360 to the US dollar in 2022.

The CPC had previously been made to borrow dollar loans whenever the central bank triggered forex shortages under its flexible inflation targeting/dual anchor conflicting regime and it printed money to artificially manipulate interest rates down.

Such loans taken from state-run Bank of Ceylon and People’s Bank was valued at 1,042 billion rupees, Finance Ministry data show.

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