CBSL confident money printing will not lead to overheating

CBSL confident money printing will not lead to overheating

CBSL confident money printing will not lead to overheating

Written by Staff Writer

23 May, 2020 | 5:54 pm

Money printing that has taken place since January this year will not result in overheating of the economy or increased inflation, the central bank said.

”Pumping more liquidity into the market, which is not excessive compared to the overall monetary expansion, will not cause any adverse impact such as overheating of the economy, or high inflation,” CBSL Senior Deputy Governor Dr.P. Nandalal Weerasinghe said on Friday during a webinar.

Dr. Weerasinghe added that the CBSL had to inject additional liquidity to the system via the purchasing of government securities, due to the decline in foreign reserves which absorbed liquidity from the market.

During the week ended 22 May 2020, the Central Bank printed Rs.11.75 Billion, bringing the total value of money printed since January this year to Rs.244.12 Billion.

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