Saturday, March 25, 2023

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CBSL does not need additional power. They have failed?


The Architects of the new Act. The USD  borrowings under their tenures have ruined Lanka’s Financials for ever.

The government is planing to give their powers lock , stock,  and barrel to the new governing body of CBSL. For a start the monetary and exchange policy, management of official international reserves and issue and manage currency of Sri Lanka with added independence to corporate with public international organizations without the sanction of the Parliament (which includes Asian Development Bank and International Monetary Fund will now be totally in the hands of CBSL.

The new Monetary Policy Board will have powers to formulate monetary policy and implementation of exchange rate regime at its sole discretion, also vested with the discretion to the Governing Board to release Deputy Governors to serve in an office or position of public international financial institutions or non-financial institutions; which provides for the releasing of officers of the Central Bank to serve in public international financial institutions and other entities; which provides for Loans to and from foreign institutions and to act as an agent or correspondent of foreign entities at its discretion.

On the Annual financial statements, even depriving the Parliament of powers to decide with regard to the policies and principles embodies therein; Clause 104 limits the accountability of the Central Bank to the Parliament with discretion to decide in offering its support for the economic policy of the Government. Ironically what the parliament and President must do is to establish a commission and find out why the Central Bank failed in its duties under the current law and hold them accountable for that. The current law gives enough powers and duties to the Central Bank to manage and they still failed.

No accountability and no questions have been asked. The Government should prosecute those in the CBSL who failed and neglected the economy. Whoever negotiated this act on behalf of the government certainly needs his/her head examined. The CBSL is a public institution that is responsible for implementing monetary policy, managing the currency of a country, inflation management , price stability and controlling the money supply. Therefore Debt Management and Bank Supervision must be taken out of the Central Bank, they have failed the country and the people over and over again. This new act will only make it worse for the country. It is therefore certainly worth listening to Former President Rajapakse addressing the CBSL Staff including the incumbent Governor Nandalal Weerasinghe. . 


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