Sri Lanka will utilize a treasury cash buffer of 1,200 billion rupees to support cyclone relief and recovery efforts, according to President Anura Kumara Dissanayake. The President announced plans to seek parliamentary approval for an additional 500 billion rupees in expenditure for 2026.
By November 2025, the Treasury’s cash buffer had increased to 1,202 billion rupees. “If we did not have the cash buffer, we would have had to look for other ways to finance the spending,” President Dissanayake stated.
Of the allocated funds, approximately 250 billion rupees will be directed towards infrastructure projects, 150 billion rupees for business recovery, and 100 billion rupees for relief and housing. An additional 130 billion rupees from existing allocations will also be redirected to disaster-related capital expenditure.
The total expenditure for disaster relief and recovery is expected to reach around 700 billion rupees, including 72 billion rupees already earmarked for spending in 2025.
The President emphasized that Sri Lanka will closely monitor the potential impact of this increased government spending on the exchange rate and inflation, as all these expenditures include imported components.
To help mitigate pressure on the exchange rate, Sri Lanka plans to secure an additional 500 million dollars in funding from the International Monetary Fund, World Bank, and Asian Development Bank, beyond what was previously planned.
(Colombo/Dec19/2025)
