In order to handle the ongoing economic crisis in Sri Lanka, the newly appointed Prime Minister Ranil Wickremesinghe has said that he is forced to print money so as to pay the salaries of government employees, reported Times Now.
In the year 2021, Sri Lanka has printed 1.2 trillion rupees and has printed 588 billion rupees in the first three months of 2022. Sri Lanka’s money supply had increased by 42% between December 2019 and August 2021.
It was in February 2020 when Sri Lanka began to extensively print money. In December 2019, taxes had been cut down by the Rajapaksa government ahead of the lockdown that badly affected the tourism of the country. Sri Lanka’s tourism is the fifth largest source of foreign revenue.
Sri Lanka has experimented with the Modern Monetary Theory which suggests that money can simply be printed by the government instead of borrowing it and increasing the revenue through taxes.
