New Act will make CBSL independent - Governor Dr. Nandalal Weerasinghe | Daily News

New Act will make CBSL independent - Governor Dr. Nandalal Weerasinghe

The new proposed Central Bank Act will make the central bank more independent and is a step taken in the right direction, said Governor of Central Bank Dr. Nandalal Weerasinghe said.

Addressing the National Law Conference 2023 under the theme ‘NAVIGATING THROUGH CRISIS –THE LAW’S ROLE’ in Colombo on Monday he said that it will make the CBSL independent sans any political intimidation.

Dr Weerasinghe said that under the Act, Central Bank will also be made accountable for their decisions which too was a good development. Commenting on the new tax structure and the anticipated IMF bailout he said both these will be followed by more funds coming to Sri Lanka including FDI.

“This will also allow some of the stalled development projects to recommence.”

He recalled that they seek IMF assistance on March 18, 2022 and will receive the first instalment on March 20, 2023, one year later.

He however said that the new increased revenue the government anticipated from Tax would mainly be used towards the welfare of the vulnerable people and it would not be used to bailout ailing State Owned Enterprises which was the common practice previously.

Hinting that the proposed tax structure would be here to stay, he said that Sri Lanka will look at a different economic model where people would not be highly dependent on imports alone.

“To meet this demand the government had to borrow both locally and internationally which resulted in debt building up and due to printing of money moving into a high inflation regime.”

He said that when Sri Lanka borrowed in 2007 the country was ranked as a low income country and creditors offered low interest, grace periods as well as 20 to 30 years to pay back.

“But when the country migrated to the next level Sri Lanka lost this ‘borrowing advantage’. Government may still have to borrow, however this time around the credit would not be used to provide ‘hand outs’ and also not for unproductive infrastructure development.”


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