Sri Lanka will use a 1,200 billion rupee cash buffer in the Treasury for cyclone relief and recovery, President Anura Kumara Dissanayake said, seeking parliamentary approval for extra spending of 500 billion rupees in 2026.
The Treasury cash buffer had expanded to 1,202 billion rupees by November 2025.
“If we did not have the cash buffer we would have had to look for other ways to finance the spending,” he said.
About 250 billion rupees will go for infrastructure, 150 billion rupees for business recovery and 100 billion rupees for relief and housing.
In About 130 billion rupees of already allocated spending will also be used for disaster related capital spending.
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Total spend for disaster relief and recovery will be around 700 billion rupees when 72 billion in 2025 spending is added, he said.
Sri Lanka will be vigilant on the possible impact on the exchange rate and inflation due to additional government spending, he said.
All these spending had imported components.
To mitigate the impact on the exchange rate, Sri Lanka to get 500 million dollars more than previously planned from the International Monetary Fund, World Bank and Asian Development, he said.