Dissanayake Says Govt Has Stopped Dollars Flowing Through ‘Black Economy’

Sri Lankan President Anura Kumara Dissanayake says government action has succeeded in curbing the illegal movement of US dollars through what he described as the country’s “black economy.”

Addressing a public rally, Dissanayake claimed that approximately US$1 billion had previously been moved illegally out of Sri Lanka, comparing the amount to the country’s annual earnings from tea exports.

He said the Criminal Investigation Department (CID) and Sri Lanka Customs had undertaken significant efforts to prevent dollars from being transferred through unofficial channels.

Dissanayake also alleged that state revenue had previously been diverted before reaching the Treasury, while some funds that reached the Treasury were subsequently misused.

“We closed all those routes and ensured that every cent that should come to the Treasury comes to the Treasury,” he said.

The President said government revenue increased to 16.7 per cent of GDP in 2025, which he described as the highest level in around three decades. He attributed the increase partly to efforts to prevent state revenue from leaking into the informal and corrupt economy.

He further said Sri Lanka had recorded its lowest budget deficit since 1957, attributing the improvement to increased revenue collection and tighter control over government expenditure.

Dissanayake also criticised previous governments for pursuing major infrastructure projects without adequate assessments, citing ports and airports as examples of projects that could result in public funds being wasted without proper studies.

Looking ahead, he said the government plans to allocate Rs2 trillion for capital expenditure next year. He also announced plans to provide each district with a Rs2 billion budgetary reserve for district-level priorities, with the involvement of District Coordinating Committees and District Secretaries.

The President also highlighted increases in welfare and education-related payments, including the Mahapola scholarship allowance, fertiliser subsidies and allowances for elderly people and persons with disabilities.

The issue of dollars moving outside formal financial channels has also been a significant concern in the Maldives as well, where authorities have introduced tougher measures to curb the parallel foreign-exchange market.

The Maldivian government has strengthened regulations governing foreign-currency transactions, including tighter restrictions on buying and selling foreign currency outside authorised channels and rates set by the Maldives Monetary Authority (MMA).

The revised framework requires foreign-exchange businesses to operate with MMA licences and imposes heavier penalties for illegal currency trading.

Authorities have also introduced measures requiring businesses earning foreign currency to convert a portion of their earnings through the formal banking system. The move is aimed at increasing dollar liquidity within the regulated financial sector and reducing reliance on unofficial markets.

Homeland Security, Labour and Technology Minister Ali Ihusaan has previously said investigations into seven unauthorised operators found that around US$76 million had been traded through the black market over a nine-month period.

The government has maintained that bringing foreign-currency transactions into the formal financial system is necessary to strengthen dollar availability and ensure that foreign exchange generated by tourism and other economic activities enters the regulated economy.