The Central Bank was forced to print money to prevent a total breakdown of fuel supply in the country because the Ceylon Petroleum Corporation (CPC) does not have enough rupees to buy dollars for fuel purchases, according to Central Bank Governor Dr. Nandalal Weerasinghe.
Dr. Weerasinghe told the media at the Central Bank on Thursday that the CPC had requested Rs. 217 billion from the Treasury for the purpose, and that the Treasury was unable to supply such a large sum immediately.
He stated that the Treasury, in turn, had made a request to the Central Bank, and that the only way for the Central Bank to meet that request is to print money.
The Central Bank’s Monetary Board responded positively last week to another request by the CPC for Rs. 185 billion for fuel purchases, citing a dire situation in the country if the request was denied, according to the Governor.
He added that the Central Bank was unable to turn down the latest request due to the country’s dire situation.