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CB Governor’s resignation makes monetary authority in shambles

Central Bank Governor Ajith Nivard Cabraal’s resignation and appointment of Ali Sabri,a lawyer handling the country’s treasury at a time of financial crisis have raised eyebrows of economic experts and moderate intellectuals in the island nation.

With the resignation of the Governor and pending a successor, the Central Bank has postponed the April monetary policy review which was scheduled for yesterday.

Post the pre-scheduled meeting, the Central Bank was to release the statement today followed by a press conference.

However the resignation of the Governor at a time where the country is facing sevre forex crisis and results of corrective measures are pending will not bring any relief for the suffering masses, several economic experts said.

The Governor of the Central Bank Ajith Nivard Cabraal on Monday said he has tendered his resignation to the President as he doesn’t want to continue under the present circumstances.

“In the context of all Cabinet Ministers resigning, I have today submitted my resignation as Governor, CBSL to President Gotabaya Rajapaksa,” he announced in a twitter post.

All 26 Cabinet Ministers had resigned with immediate effect late on Sunday night.

Cabraal, who had served as the State Minister of Money & Capital Market and State Enterprise Reforms of the 9th Parliament, had tendered his resignation as an SLPP National List MP to once again take over the position of Governor of the Central Bank of Sri Lanka in September last year.

Former CBSL Deputy Governor W.A. Wijewardena following Cabraal’s resignation said he had hope for CB and the monetary sector because Cabraal was better than his predecessor Prof. W.D. Lakshman.

“Many blamed me for doing so; my explanation was that like King Mahasen, he had done both merits and demerits and we should now give him an opportunity;Mr Wijewardena said.

He noted that he even gave him four pieces of advice. That advice was: 1) Remove Lakshman shock of holding the rupee at 203/$ and getting importers to put 100% margin 2) He should realise he is Governor of the nation’s CB and not Rajapaksa and serve our interest 3) Ask Gota to go back to tax system prior to 2019 and 4) Seek IMF funding,” Wijewardena recalled.

“Sadly, he failed to listen to this advice and instead pronounced that he will go for a ‘homegrown solution’ claiming that CB has more experts than outside bodies, he disclosed.

He said that thisCB road map was a non-event because ANC had touched on areas for which he had no authority. Also, it was reviewed in December 2021 to find none of the goals have been achieved. T

here was still no positive response from ANC and he stubbornly held to his view of not allowing the rupee to depreciate and MF support; finally, when all reserves were gone, he had to allow LKR to fall freely causing problems for his political masters and SL, how nice had he been listening to us?” queried Wijewardena via his tweet

Referring to the new appointment of Finance Minister,another eminent economists who wished to remain anonymous noted that this is not the time for experimenting with ad hoc patch work solutions for the benefit of a few in the government headed by Gotabaya Rajapaksa as his decision to appoint Ali Sabri for the post of Finance Minister and the acceptance of resignation of Mr. Cabraal will make the crisis situation worse aggravating it to boiling point.

Several high level officials have alaready expressed concern on the decision taken by the president claiming that it will definitely boomerang over the present administration.

They expressed their dismay at the failure of the President to find suitable ruling party members to hand over the Finance ministerial portfolio as there are many qualified and experienced MPS with economic and financial background in the SLPP.

They noted that Ali Sabri was doing a good job as Justice and he was working tirelessly to introduce judicial reforms and a new constitution.

But the public officials will soon protest against this appointment unless no remedial action is taken by the President , they added.

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