I came to serve the people and not any politician – CBSL Governor

“My intention is to maintain the Central Bank as a highly independent institution that could take decisions without any political interference and to also get the support of multi-lateral agencies in Sri Lanka’s efforts to overcome its economic difficulties. I came to serve the people and not any politician, newly appointed Central Bank Governor Dr. Nandalal Weerasinghe said at his first media briefing held at the Central Bank Head Office in Colombo after assuming duties last Friday.

The CBSL Governor said a virtual meeting had been requested for April 11 with the IMF. The Letter of Intent to the IMF is to be presented later, he said.

Dr. Weerasinghe said that he can’t reverse what has happened but will use all his experience, including his exposure to multi-lateral partners, such as IMF and World Bank, to serve the people.

Weerasinghe added: “I want to run the Central Bank independently without any external influence and I have been given the authority to do so by the President. I have been asked by him to expedite measures to get the country out of the current crisis.

‘Overcoming the crisis was not something that could be done overnight and would take some time, but political and social stability is essential to overcome the present crisis.

‘I would be taking a number of correct decisions without any political interference. I also pledge to work with transparency and truthfulness. I would not be hiding anything from the public and I hope to work independently.

‘The Monetary Board of the Central Bank of Sri Lanka has decided to increase policy interest rates by 7% to offset the imbalance in the country’s financial system. This is the first time in Sri Lanka that the interest rate has been raised so high.

‘The new rate hike will give a strong signal to investors and markets that we are coming out of this as soon as possible.

“We want to give a firm signal. We are serious in what we are doing and we are independent in what we are doing. We took the necessary and sufficient actions today immediately to address the situation. With this measure I expect to see some stability in the market and a positive reaction from it from Monday when it opens.

‘We met with the bankers soon after assuming duties and gave them a clear message that we will be very transparent in dealing with them. We will be open, transparent and truthful and we need their full support. I want to be very clear that this message is not one of blind positivity.

“Things are challenging and we need to take decisive action. Things will get worse before they get better, but we need to apply the brakes to this vehicle before it crashes.

‘It won’t turn around immediately. The situation could get worse and take weeks or months. But the turnaround will happen at some point. I am very confident that we can turn it around but the necessary conditions for it are not only the economic policies but also the two key components; political stability and social stability.

‘What we expect is a stable government, evolved democratically and constitutionally, and the social unrest at present should come down sooner so that people can get into normal activity so that their actions will be much more effective.’