Indrajith Coomaraswamy the former Governor CBSL recently issued a statement supporting the current Governor Nandalal Weerasinghe.
How ethical is this? It was Coomaraswamy who recommended Nandalal to the current post. Whilst Coomaraswamy was Governor he made Nandalal the CBSL CEO. Coomaraswamy was strong in research, so according to sources he was struggling when it came banking, markets and risk.
He was heavily dependent on others. Central Bank sources say the current Governor is virtually dependent on Coomaraswamy since he lacks confidence and also too theoretical in his decisions. He is not a practical man, they noted. As a result his policy interventions are pushing the country into a bigger crisis.
The current debt crisis is also due to excessive commercial borrowings of Coomaraswamy at rates way above market. Bandula Goonwardana has repeatedly said this in Parliament.
Coomaraswamy has still not given an explanation as to why he borrowed 1 Billion USD, when the crisis ridden Yahapalana government was about to collapse. Questions are asked if a third party was involved given his closeness to a wheeler dealer Yahapalana minister in the last government.
These must be investigated?
Sri Lanka after the CBSL decision to announce default has been officially declared in default by ratings agencies after the non-payment of coupons on two of its sovereign bonds. This should have never happened in the first place if the CBSL had been proactive instead of reactive.
Sri Lanka is now desperate for a sustainable loan package from the IMF while undertaking structural reforms that would draw new investments into the country.
Ex Governor Nivard Cabraal though he adopted a cavalier approach had total control of the situation, sources say he never would have never defaulted on a paltry payment of $78 million USD. The default has virtually shut the door for local companies to borrow from overseas. The implications of this decision will be seen for years.