Prior to even comprehend his self-advocacy for service extension, the Report Card of the Governor of the Central Bank of Sri Lanka (CBSL), Nandalal Weerasinghe has to be looked into.
CBSL Governor’s Report Card as at 20th June 2022:
- Raised interest rates by a staggering seven per cent and killed all Small and Medium Enterprises (SMEs) and Construction sectors. Now, the economy is set to contract by eight per cent in 2022 as per the World Bank estimates.
- Defaulted on Forex loans and that resulted in many other problems:
a) No Letters of Credit (LCs) for banks
b) Rating downgraded to “D”
c) No overseas financial institution is now giving a single loan to Sri Lanka
d) Fuel, gas, coal, medicine, and other essential imports have to be paid for up-front, as credit cannot be arranged: therefore, there are massive shortages in the country.
e) Almost all Forex funded infrastructure projects have been stopped.
f) All Foreign Direct Investment (FDI) inflows have stopped.
g) All local banks are highly vulnerable because their collective Sri Lankan International Sovereign Bond (ISB) holdings of about USD 3 billion (Rs. 1,080 billion) will now have to be provided for as bad debts, and therefore the banks will have to absorb those huge losses. When that is seen in the Bank balance sheets, the stock market will also completely collapse. - Allowed the Rupee to slide from 299 to 377, before “fixing” at 360 from 12th May onwards; claimed that with the entry of IMF, the Rupee will strengthen, but it was the reverse that happened.
- Stopped “on-account” forex payments and thereby killed the entire food and beverage, IT, logistics and construction trades.
- Printed a record-breaking Rs.316 billion at double the speed of his two predecessors, without even offering an alternative.
- Plays the “blame-game” all the time, blaming past decisions for the current situation, but no cohesive plan has still been presented by him, while whatever his initiatives taken by him so far, have been leading to disastrous results.
- Works earnestly towards his re-appointment by shamelessly getting the CB staff and pensioners and some journalists to send recommendation letters about him regularly to the media.
- Spent lavishly on a big jaunt to Washington that cost the tax payer Rs.18 million, without any benefit whatsoever to the country.
- Alienated China so badly that it is likely that China may not be receptive to the restructuring arrangements as proposed by the IMF and others
- Has side-lined and undermined the Prime Minister and Finance Minister, having deceived and got the support of the President.
- Stopped the “loan moratorium” to SME businesses and others thereby crippling millions of livelihood opportunities in the entire country
- Hasn’t been able to arrange a single new line of credit or bridging finance from any country or institution, other than merely using the facilities that were arranged previously.
Has the CBSL Governor passed or failed?
You decide.
