Normally, a country prints currency notes on par with its income, but there have been instances of printing currency notes to escape crisis situations.

The abnormal printing of currency notes leads to a speedy increase in the prices of goods and services and the local currency gets depreciated internationally.

Meanwhile, the government is reportedly at talks with Credit Suisse and several other lending institutions to obtain a 500 million dollar loan.

Deputy minister Dr. Harsha de Silva has admitted plans to obtain credit, but said no decision has been taken about the amount to be obtained.

The rupee has depreciated from Rs. 130 per dollar to Rs. 135 pe dollar within the last two months.

Printing of currency notes will further depreciate the rupee to around Rs. 140 per dollar, it is projected.

Last week, the Central Bank obtained Rs. 130,000 m from an international development bond issue and also secured Rs. 22,000 m locally through an issue of treasury bonds.

The total credit obtained in the first four months of the year stands at Rs. 526.2 billion (local) and Rs. 158 b (foreign), finance minister Ravi Karunanayake has told the cabinet.

Within six months of coming to power, the UNP-led government obtained Rs. 378 b in credit, which is higher than a total of Rs. 260 b obtained during the whole of last year.