Showers or thundershowers will occur at several places in Western, Sabaragamuwa, Central and North-western provinces and in Galle and Matara districts after 2.00 p.m. Fairly heavy showers above 75 mm can be expected at some places in Western and Sabaragamuwa provinces and in Galle and Matara districts.
Several spells of showers may occur in Eastern and Uva provinces and in Hambanthota district.
Misty conditions can be expected at some places in Western, Sabaragamuwa, Central, Uva and North-central provinces and in Galle and Matara districts during the morning.
The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.
March 18, Colombo (LNW): The Sri Lanka Export Development Board (EDB) has taken an important step in promoting the growth of the country’s boat building and boating industry by creating a comprehensive regulatory framework. This initiative is designed to enhance the sector’s potential and improve its international competitiveness.
The boat and shipbuilding sector has grown rapidly, emerging as a multi-million dollar industry that offers great promise for economic growth. With Sri Lanka’s ability to construct and operate yachts for chartering and nautical activities, there is significant potential to bolster the country’s nautical tourism industry.
By attracting foreign yachts and visitors, Sri Lanka can offer unique experiences like whale and dolphin watching, scuba diving, leisure fishing, and water sports, making it an ideal year-round tourist destination.
To ensure effective collaboration and understanding of these changes, the EDB organized awareness sessions for both public and private stakeholders, focusing on a recent gazette notification related to the new regulatory framework. These sessions aimed to inform and engage the stakeholders in the process, helping them understand the importance of these regulations for the sector’s growth.
For the industry to thrive, a robust regulatory framework covering the entire value chain is crucial. There has been a gap in regulating leisure craft operations and managing the registration of visiting yachts, which has hindered the sector’s development.
In response, the Sri Lankan Government allocated funds to create an effective framework. Working in collaboration with the relevant Ministry and Lloyd’s Register Asia, the EDB facilitated consultations and workshops to gather insights and feedback from public and private sector representatives, ensuring the regulations addressed all necessary aspects.
After completing the consultation process, the Merchant Shipping Secretariat under the Ports and Shipping Ministry took steps to finalize the regulations. These were gazetted under the Merchant Shipping Act, No. 52 of 1971, with the official Gazette issued on 31 December 2024.
To support the implementation of these new regulations, the EDB held awareness sessions for government officials on 25 February and for private sector stakeholders on 11 March.
The introduction of these regulations is a crucial move towards strengthening the boat building and boating industry in Sri Lanka. This effort is expected to significantly contribute to the country’s economic growth and position Sri Lanka as a prominent player in the global maritime industry.
By addressing the sector’s regulatory needs, Sri Lanka is on track to maximize its boat building and boating potential, creating new economic opportunities and enhancing its maritime tourism appeal.
March 18, Colombo (LNW): Sri Lanka’s digital services sector is undergoing significant changes following the introduction of new tax policies in the national budget. While these reforms pose challenges, the industry remains committed to fostering innovation and maintaining long-term growth. The Digital Economy Ministry, alongside key stakeholders, is working to ensure that Sri Lanka remains a competitive hub for digital services both regionally and globally.
As one of the nation’s most resilient industries, the digital sector has successfully navigated economic downturns, technological disruptions, and the impact of the COVID-19 pandemic. Despite the challenges posed by the recent tax measures, industry leaders and policymakers are actively exploring ways to minimize negative effects while capitalizing on long-term opportunities.
A key objective of the new taxation framework is to establish a level playing field by ensuring that both local and foreign digital service providers contribute fairly to the economy. In the past, international digital firms operated in Sri Lanka without tax obligations, creating an uneven competitive landscape. The revised policy aims to generate additional revenue and promote fair competition. However, concerns persist regarding its impact on digital exports and freelancers, as increased tax burdens may drive companies to relocate to more favorable tax jurisdictions.
Despite these concerns, Sri Lanka is taking proactive steps to sustain and grow its digital economy. The government is collaborating with industry organizations to introduce supportive measures, including concessionary loan schemes, skill development initiatives, enhancements in digital infrastructure, and the creation of IT parks and co-working spaces to foster entrepreneurship. Additionally, a $50 million Fund-of-Funds is being established to attract global investors, support startups, and encourage intellectual property development.
One of the government’s notable initiatives is the expansion of GovPay, a digital payment platform designed to modernize government transactions, enhance financial transparency, and improve revenue collection. Plans are in place to relaunch QR-based payment systems with minimal merchant fees and to introduce incentives that encourage digital transactions.
Looking ahead, the government and industry leaders have set ambitious targets for 2030, including expanding the digital economy to $15 billion and achieving $5 billion in digital exports. Reaching these milestones requires a balanced approach that ensures fiscal sustainability while fostering an environment conducive to digital innovation and enterprise development.
Digital Economy Deputy Minister Eng. Eranga Weeraratne acknowledged that while the new tax policies demand strategic adjustments, they also provide an opportunity to strengthen the country’s financial position. He emphasized the government’s commitment to reinvesting tax revenue into enhancing connectivity, IT infrastructure, and capacity-building initiatives, with over Rs. 31 billion ($100 million) allocated for digital economic development in 2025.
Industry leaders underscore the importance of collaboration between policymakers and businesses to align regulatory frameworks with industry needs. Federation of IT Industry Sri Lanka (FITIS) Chairman Indika De Zoysa highlighted the sector’s role in driving digital transformation, advocating for policies that support innovation and competitiveness. Similarly, Sri Lanka Association for Software and Services Companies (SLASSCOM) Chairman Nishan Mendis called for a stable, consistent policy environment that balances taxation with economic growth.
Other experts echoed the need for a comprehensive approach. BCS Sri Lanka Chairman Vajeendra S. Kandegamage emphasized the importance of strengthening the IT talent pool, clarifying regulations, and offering incentives for technology-driven enterprises. Meanwhile, Computer Society of Sri Lanka (CSSL) President Heshan Karunaratne stressed the need for holistic strategies that extend beyond taxation, including targeted incentives for IT exports and freelancers.
As discussions between the government and industry stakeholders continue, the focus remains on ensuring that Sri Lanka’s digital economy thrives in the long term. By balancing tax policies with strategic investments and industry support, the country aims to reinforce its position as a leading digital economy. The collaboration of policymakers, businesses, and industry organizations will be crucial in shaping Sri Lanka’s digital future.
March 18, Colombo (LNW): Sri Lanka’s economy is showing signs of recovery, with the manufacturing and service sectors witnessing a resurgence. The manufacturing industry, which has faced challenges due to economic instability and supply chain disruptions, is experiencing an uptick in production and new orders. Similarly, the service sector, a significant contributor to the economy, is expanding steadily. This revival is largely driven by increased consumer demand, particularly in anticipation of the festive season.
However, the introduction of new taxation policies has created both opportunities and challenges for businesses. While the increased tax revenue is aimed at stabilizing the economy and reducing fiscal deficits, higher tax burdens on companies could impact profitability and operational efficiency. Manufacturers and service providers must navigate these changes strategically to maintain growth momentum.
Sri Lanka’s business activities in the manufacturing and services sectors continued to expand in February, supported by rising demand ahead of the festive season, according to the latest Purchasing Managers’ Index (PMI) compiled by the Central Bank.
The PMI for manufacturing registered 56.8 in February, down from 59.0 in January but still indicating steady growth. The food and beverage manufacturing sector, in particular, is ramping up production to meet increased demand, driving expansions in new orders (60.5) and production sub-indices (53.0), according to the Central Bank.
Employment levels (57.0) and stock of purchases (55.0) also saw growth, reflecting proactive adjustments to accommodate rising demand. However, suppliers faced increased pressure, leading to longer delivery times, with the suppliers’ delivery time index reaching 56.6 in February.
The outlook for manufacturing remains optimistic, with expectations of continued growth over the next three months, primarily due to festive season demand.
Similarly, the services sector demonstrated a slower but steady expansion, with the Sri Lanka Purchasing Managers’ Index for Services recording an index value of 56.5 in February 2025. Growth was observed across various sub-sectors, driven by rising consumer activity and improved business sentiment.
Financial services experienced a notable boost, supported by increased lending activities. Other segments, including wholesale and retail trade, education, real estate, professional services, accommodation, food and beverage, insurance, and other personal services, also saw positive momentum.
New business activities grew at 58.5 in February, albeit at a slightly slower pace compared to January (59.0). This expansion was largely fueled by growth in financial services, accommodation, and education, real estate, and transportation sectors.
Employment levels continued to rise, with the employment index recording 59.6, as businesses expanded their workforce in preparation for the festive period. Meanwhile, backlogs of work declined at a faster rate, registering 45.6.
Business expectations for the coming months remain highly optimistic, with the index for anticipated business activities rising to 81.3. This reflects strong confidence among businesses, supported by seasonal demand and improving economic conditions.
March 18, Colombo (LNW): Sri Lanka’s agricultural industry is currently grappling with a substantial decline in production, particularly affecting staple crops like paddy, tea, and coconut. This downturn is compounded by the impact of global agricultural supply chain disruptions, worsened by extreme weather conditions.
The ripple effects of these challenges are pushing food prices higher across the island, intensifying inflationary pressures that are becoming a significant concern for both the public and policymakers alike.
In Sri Lanka, the country’s key crop, paddy, has faced a marked reduction in output. By the end of December 2024, the forecast for the 2024/25 Maha season predicted a decrease in production to 2.57 million metric tonnes, reflecting a 5.77 percent dip compared to the previous season, according to data from the Central Bank.
This reduction in paddy production has contributed to a sharp rise in rice prices, with retail outlets facing significant shortages. Some rice varieties have been out of stock for extended periods, with some stores experiencing shortages lasting weeks or even months.
Despite government efforts to manage the situation through rice imports, setting minimum paddy prices, and imposing maximum rice prices, the market remains volatile and unstable.
Tea, another key agricultural export of Sri Lanka, has had mixed fortunes. Although tea production experienced notable growth in December 2024 (9.6 percent) and January 2025 (14.6 percent), it suffered a dramatic 22 percent decline in February 2025, amounting to just 15.59 million kilograms.
As a result, the cumulative production for the first two months of 2025 showed a slight decrease. At the same time, tea auction prices have been trending downward, reflecting the overall struggles of the sector.
Coconut production has also been severely impacted, experiencing declines of 33.1 percent in December 2024 and 32.2 percent in January 2025. This sharp reduction in supply has led to a surge in coconut prices, with consumers now paying nearly Rs.200 per nut. This situation is putting additional strain on household budgets, further exacerbating the overall inflationary pressures.
However, there is a bright spot in Sri Lanka’s rubber production, which grew by 32.4 percent in December 2024. Despite this positive development, provisional data indicates a potential decline in rubber output in January 2025.
Globally, the situation is equally concerning, as both coffee and cocoa prices have risen significantly due to adverse weather conditions. In 2024, global coffee prices surged by 40 percent, reaching multi-year highs.
Similarly, cocoa prices hit an all-time high in December 2024, climbing by 30 percent, driven by poor weather conditions in West Africa, particularly in Côte d’Ivoire and Ghana, which together supply 60 percent of the world’s cocoa.
The combined effects of local agricultural challenges and global supply chain disruptions are creating a challenging landscape for Sri Lanka’s agricultural sector and consumers alike.
March 18, Colombo (LNW): Thundershowers accompanied by severe lightning are likely to occur at several places in Western, Sabaragamuwa, Central, Southern and Uva provinces, the Natural Hazards Early Warning Centre of the Department of Meteorology warned.
The statement added that there may be temporary localised strong winds during thundershowers.
The general public is urged to take adequate precautions to minimise damages caused by lightning activity.
March 18, Colombo (LNW): Parliament has given the green light to the establishment of seven Sectoral Oversight Committees as part of the governance structure for the Tenth Parliament.
The decision, which ensures a balanced distribution of power, allocates four committee chairmanships to the Government and three to the Opposition.
The motion for the formation of these committees was introduced in Parliament by Leader of the House, Minister Bimal Rathnayake on March 17, 2025.
The House of Parliament promptly approved the motion following the recommendation of the Committee of Selection.
In line with the agreements reached, the chairmanships of several key committees were allocated across both sides of the House. The Government will take control of the chairmanships for the Sectoral Oversight Committees on Economic Development and International Relations, Health, Media and Women’s Empowerment, Science, Technology and Digital Transformation, as well as Governance, Justice and Civil Protection.
On the other hand, the Opposition will oversee the Sectoral Oversight Committees on Infrastructure and Strategic Development, Education, Manpower and Human Capital, and Environment, Agriculture and Resource Sustainability.
March 18, Colombo (LNW): President Anura Kumara Dissanayake has outlined a series of decisive steps aimed at tackling organised crime and drug abuse in Sri Lanka.
During a meeting with the police chiefs of the Western Province at the Presidential Secretariat, the President highlighted the urgent need for both enhanced facilities and the introduction of new, stringent legislation to address these growing issues.
In his address, President Dissanayake stressed the critical role of the Police Department in upholding the rule of law, asserting that the maintenance of law and order is a fundamental responsibility of the police force.
He pointed out that without the supremacy of the law, establishing a fair and just society in Sri Lanka would remain an unattainable goal.
The President’s commitment to tackling organised crime and drug-related offences aligns with his broader vision of creating a safer, more equitable nation.
As part of his administration’s efforts, he promised to prioritise the necessary resources and legal reforms to combat these challenges effectively, ensuring a more secure environment for all citizens.
March 18, Colombo (LNW): In a move aimed at supporting the agricultural sector, the Cabinet of Ministers has approved the allocation of fertiliser subsidies for farmers planning to cultivate land during the 2025 Yala season.
The decision follows a proposal presented by the Minister of Agriculture, Livestock, Lands, and Irrigation, which outlines financial assistance for various farming activities.
Under the approved plan, farmers involved in paddy cultivation will receive a subsidy of Rs. 25,000 per hectare, with a limit of two hectares per farmer.
Additionally, those cultivating other field crops on paddy lands, as identified in seasonal consultations, will be eligible for a subsidy of Rs. 15,000 per hectare, again with a cap of two hectares.
This article is to present key points published in the Daily Mirror, 14 March 2025 (Press here to read the article), based on a public lecture made by Dr. Indrajit Coomaraswamy, Central Bank Governor 2016-2019, on 10 March 2025 in celebration of the 75th Anniversary of the Central Bank of Sri Lanka.
This blog article reveals the importance of the contents of the Daily Mirror article to provide a key source of information critical for investigating into those who are responsible for the economic crisis that the country has been confronting since late 2020 if relevant authorities are interested in conduct of a technical investigation.
It is the general practice seen in many countries that official reports are published after economic crises to inform the public of causes, impact and resolution measures of such crises and reform agenda proposed to prevent the recurrence of such crises.
However, whole blame for the crisis in Sri Lanka has been singularly passed to a handful of leaders and officials who were involved in managing the economy in 2020/21 based purely on political agendas without any official crisis reports of macroeconomic nature published by relevant authorities.
Key points in the Daily Mirror article showing untold causes of the crisis
I list down important points below. However, I don’t wish to comment or add to them in order to keep their investigative value open for public debate or investigation.
Despite a pushback against future borrowings via International Sovereign Bonds (ISBs) from certain quarters, Sri Lanka will, at some point, have to tap international capital markets to prevent further economic compression and close the external financing gap, which remains wide.
Sri Lanka should not and cannot achieve smooth debt management and gradually reduce its external financing needs before tapping ISBs again—something the country has neither done nor been able to do since 2019.
Without such borrowings—typically at a relatively lower cost than portfolio investments in rupee government securities and with longer maturities—Sri Lanka will struggle to bridge its external financing gap.
Unless funds come from sovereign bonds, Sri Lanka would experience compression in both consumption and investment, which the country cannot afford due to the deep contraction and its economic consequences on businesses and the public alike.
ISBs are probably the most effective way of doing it unless we sell ourselves to some donor who will bankroll us, which is not a good outcome.
Total outstanding sovereign bonds rose from US$ 5.0 billion at the beginning of 2015 to US$ 15.0 billion by the end of 2019, with US$ 4.5 billion raised in 2019 alone.
This was done for two reasons—first, to reduce reliance on highly volatile portfolio inflows into government securities, which stood at around US$ 3.5 billion in early 2015, and second, to reduce approximately US$ 2.5 billion worth of currency swaps with other central banks.
Portfolio investments in rupee securities were causing significant trouble due to their extreme volatility, creating uncertainties for policy-making at a time when the U.S. Federal Reserve was raising interest rates. As a result, portfolio investments were brought down to about US$ 600 million and currency swaps down to US$ 500 million by the end of 2019, from where they stood at the start of 2015.
Funds raised through ISBs were crucial in extending the maturities of Sri Lanka’s external debt and lowering borrowing costs, as ISBs were issued at rates between 6 percent and 7 percent, compared to rupee bonds, which were around 12 percent at the time.
US$ 4.5 billion worth of bonds issued in 2019 were raised both to extend maturities and to create buffers for the next administration, which was almost certain to come into power later that year due to public dissatisfaction following the Easter bombings.
It was fairly certain that the economic stabilisation programme would not continue under a future administration, which could lead to the discontinuation of the then-ongoing International Monetary Fund (IMF) programme.
Even the markets were willing to lend to Sri Lanka at the time, as they believed in the country’s progress in strengthening macroeconomic fundamentals under the IMF programme and through the Active Liability Management Act, which was passed in parliament during that period.
Pushing back against claims that large-scale bond issuances were primarily responsible for Sri Lanka’s 2022 debt default, Dr. Coomaraswamy argued that these borrowings actually helped delay an otherwise inevitable default. Without continued to borrow or issue ISBs, the default would have been much earlier because of literally borrowing to repay the debt where at least 90 percent of fresh borrowings during that period were used to settle existing debts.
Concluding remarks
The celebration referred to in the article seems to be that of the Central Bank operated under the Monetary Law Act (MLA) since 28 August 1950 until 13 September 2023. The present Central Bank of Sri Lanka is the world’s newest central bank that was established on 14 September 2023 under the Central Bank of Sri Lanka Act, No. 16 of 2023 which repealed the MLA ,which is to celebrated its second anniversary in September this year.
However, the said public lecture is really an insight into how those who governed the Central Bank under the MLA caused the catastrophe to the economy and living standards during its last years of operations despite their public mandates.
The Central Bank under the MLA was the monetary policymaker, public debt manager, fiscal agent, fiscal adviser, banker to the government, country’s foreign reserve manager, exchange rate manager and bank regulator supported by a wide range of public policy powers granted by the MLA for the overall statutory objective of maintaining the economic and price stability and financial system stability of the country financed by discretionary money printing as determined by a handful of central bank managers. This is the only institution in the county that does not encounter financing constraints for its operations. Therefore, the Central Bank has been so generous even to borrow through ISBs in 2019 to create a buffer for the next government predicted by the Central Bank on prevailing political circumstances.
Therefore, in reading through relevant provisions of the MLA and events that led to the crisis, there is no doubt that the crisis was the singular outcome of the gross failure and negligence of the managers of the Central Bank on their public policy duties especially after 2015.
For any investigation on the crisis if it were to commence, the Exter Report along with subsequent amendments made to the MLA from time to time would be a necessary source of information. In addition, two paragraphs are noted below from Mr. John Exter’s message sent to the 25th Anniversary Commemorative Volume of the Central Bank, who alerted a difficult period of next 25 years and beyond for the Central Bank.
Until we do the investigation and resolve the monetary and economic structure of the country to be capable of mobilizing resources and opportunities for higher living standards targeted in next 50 years, the present crisis may never end as the monetary system will be governed by those of the network macroeconomic thoughts connected to the contents of the Daily Mirror article as revealed at present. Therefore, what we should be interested in are only the capable systems and not artificially created images of specific persons and institutions.
Otherwise, the crisis will continue as the single source of the country’s political instability created by leaders struggling for the power through false promises made for recovering the economy and people from the crisis without knowing real causes and effective recovery measures.
Finally, contents of the Daily Mirror article show how the economy and people of Sri Lanka were trapped in the global network of IMF and financial investors and firm signals of its persistence despite the change in the hands of national leaders.
(This article is released in the interest of participating in the professional dialogue to find out solutions to present economic crisis confronted by the general public consequent to the global Corona pandemic, subsequent economic disruptions and shocks both local and global and policy failures. All are personal views of the author based on his research in the subject of Economics which have no intension to personally or maliciously discredit characters of any individuals.)
P Samarasiri
Former Deputy Governor, Central Bank of Sri Lanka
(Former Director of Bank Supervision, Assistant Governor, Secretary to the Monetary Board and Compliance Officer of the Central Bank, Former Chairman of the Sri Lanka Accounting and Auditing Standards Board and Credit Information Bureau, Former Chairman and Vice Chairman of the Institute of Bankers of Sri Lanka, Former Member of the Securities and Exchange Commission and Insurance Regulatory Commission and the Author of 13 Economics and Banking Books and a large number of articles published.)
Article’s purpose and background
This article is to present key points published in the Daily Mirror, 14 March 2025 (Press here to read the article), based on a public lecture made by Dr. Indrajit Coomaraswamy, Central Bank Governor 2016-2019, on 10 March 2025 in celebration of the 75th Anniversary of the Central Bank of Sri Lanka.
This blog article reveals the importance of the contents of the Daily Mirror article to provide a key source of information critical for investigating into those who are responsible for the economic crisis that the country has been confronting since late 2020 if relevant authorities are interested in conduct of a technical investigation.
It is the general practice seen in many countries that official reports are published after economic crises to inform the public of causes, impact and resolution measures of such crises and reform agenda proposed to prevent the recurrence of such crises.
However, whole blame for the crisis in Sri Lanka has been singularly passed to a handful of leaders and officials who were involved in managing the economy in 2020/21 based purely on political agendas without any official crisis reports of macroeconomic nature published by relevant authorities.
Key points in the Daily Mirror article showing untold causes of the crisis
I list down important points below. However, I don’t wish to comment or add to them in order to keep their investigative value open for public debate or investigation.
Despite a pushback against future borrowings via International Sovereign Bonds (ISBs) from certain quarters, Sri Lanka will, at some point, have to tap international capital markets to prevent further economic compression and close the external financing gap, which remains wide.
Sri Lanka should not and cannot achieve smooth debt management and gradually reduce its external financing needs before tapping ISBs again—something the country has neither done nor been able to do since 2019.
Without such borrowings—typically at a relatively lower cost than portfolio investments in rupee government securities and with longer maturities—Sri Lanka will struggle to bridge its external financing gap.
Unless funds come from sovereign bonds, Sri Lanka would experience compression in both consumption and investment, which the country cannot afford due to the deep contraction and its economic consequences on businesses and the public alike.
ISBs are probably the most effective way of doing it unless we sell ourselves to some donor who will bankroll us, which is not a good outcome.
Total outstanding sovereign bonds rose from US$ 5.0 billion at the beginning of 2015 to US$ 15.0 billion by the end of 2019, with US$ 4.5 billion raised in 2019 alone.
This was done for two reasons—first, to reduce reliance on highly volatile portfolio inflows into government securities, which stood at around US$ 3.5 billion in early 2015, and second, to reduce approximately US$ 2.5 billion worth of currency swaps with other central banks.
Portfolio investments in rupee securities were causing significant trouble due to their extreme volatility, creating uncertainties for policy-making at a time when the U.S. Federal Reserve was raising interest rates. As a result, portfolio investments were brought down to about US$ 600 million and currency swaps down to US$ 500 million by the end of 2019, from where they stood at the start of 2015.
Funds raised through ISBs were crucial in extending the maturities of Sri Lanka’s external debt and lowering borrowing costs, as ISBs were issued at rates between 6 percent and 7 percent, compared to rupee bonds, which were around 12 percent at the time.
US$ 4.5 billion worth of bonds issued in 2019 were raised both to extend maturities and to create buffers for the next administration, which was almost certain to come into power later that year due to public dissatisfaction following the Easter bombings.
It was fairly certain that the economic stabilisation programme would not continue under a future administration, which could lead to the discontinuation of the then-ongoing International Monetary Fund (IMF) programme.
Even the markets were willing to lend to Sri Lanka at the time, as they believed in the country’s progress in strengthening macroeconomic fundamentals under the IMF programme and through the Active Liability Management Act, which was passed in parliament during that period.
Pushing back against claims that large-scale bond issuances were primarily responsible for Sri Lanka’s 2022 debt default, Dr. Coomaraswamy argued that these borrowings actually helped delay an otherwise inevitable default. Without continued to borrow or issue ISBs, the default would have been much earlier because of literally borrowing to repay the debt where at least 90 percent of fresh borrowings during that period were used to settle existing debts.
Concluding remarks
The celebration referred to in the article seems to be that of the Central Bank operated under the Monetary Law Act (MLA) since 28 August 1950 until 13 September 2023. The present Central Bank of Sri Lanka is the world’s newest central bank that was established on 14 September 2023 under the Central Bank of Sri Lanka Act, No. 16 of 2023 which repealed the MLA ,which is to celebrated its second anniversary in September this year.
However, the said public lecture is really an insight into how those who governed the Central Bank under the MLA caused the catastrophe to the economy and living standards during its last years of operations despite their public mandates.
The Central Bank under the MLA was the monetary policymaker, public debt manager, fiscal agent, fiscal adviser, banker to the government, country’s foreign reserve manager, exchange rate manager and bank regulator supported by a wide range of public policy powers granted by the MLA for the overall statutory objective of maintaining the economic and price stability and financial system stability of the country financed by discretionary money printing as determined by a handful of central bank managers. This is the only institution in the county that does not encounter financing constraints for its operations. Therefore, the Central Bank has been so generous even to borrow through ISBs in 2019 to create a buffer for the next government predicted by the Central Bank on prevailing political circumstances.
Therefore, in reading through relevant provisions of the MLA and events that led to the crisis, there is no doubt that the crisis was the singular outcome of the gross failure and negligence of the managers of the Central Bank on their public policy duties especially after 2015.
For any investigation on the crisis if it were to commence, the Exter Report along with subsequent amendments made to the MLA from time to time would be a necessary source of information. In addition, two paragraphs are noted below from Mr. John Exter’s message sent to the 25th Anniversary Commemorative Volume of the Central Bank, who alerted a difficult period of next 25 years and beyond for the Central Bank.
Until we do the investigation and resolve the monetary and economic structure of the country to be capable of mobilizing resources and opportunities for higher living standards targeted in next 50 years, the present crisis may never end as the monetary system will be governed by those of the network macroeconomic thoughts connected to the contents of the Daily Mirror article as revealed at present. Therefore, what we should be interested in are only the capable systems and not artificially created images of specific persons and institutions.
Otherwise, the crisis will continue as the single source of the country’s political instability created by leaders struggling for the power through false promises made for recovering the economy and people from the crisis without knowing real causes and effective recovery measures.
Finally, contents of the Daily Mirror article show how the economy and people of Sri Lanka were trapped in the global network of IMF and financial investors and firm signals of its persistence despite the change in the hands of national leaders.
(This article is released in the interest of participating in the professional dialogue to find out solutions to present economic crisis confronted by the general public consequent to the global Corona pandemic, subsequent economic disruptions and shocks both local and global and policy failures. All are personal views of the author based on his research in the subject of Economics which have no intension to personally or maliciously discredit characters of any individuals.)
P Samarasiri
Former Deputy Governor, Central Bank of Sri Lanka
(Former Director of Bank Supervision, Assistant Governor, Secretary to the Monetary Board and Compliance Officer of the Central Bank, Former Chairman of the Sri Lanka Accounting and Auditing Standards Board and Credit Information Bureau, Former Chairman and Vice Chairman of the Institute of Bankers of Sri Lanka, Former Member of the Securities and Exchange Commission and Insurance Regulatory Commission and the Author of 13 Economics and Banking Books and a large number of articles published.)
