CBSL Chief Warns Against Economic Policy Changes

by Zulfick Farzan 08-05-2024 | 11:29 AM

COLOMBO (News 1st); Dr. Nandalal Weerasinghe, the Governor of the Central Bank, issued a cautionary note today regarding potential changes to the country’s current economic policy.

Speaking at a press conference held at the Central Bank on Tuesday (7), Dr. Weerasinghe emphasized that any deviation from the existing policy framework could lead to a return to economic stagnation.

Dr. Weerasinghe also provided insight into the ongoing International Monetary Fund (IMF) program during a recent interview.

He stated that the country is currently undergoing the second review and anticipating the third tranche of the IMF program, and highlighted that while there have been alterations to the program since the staff-level agreement in September 2022, the fundamental objectives remain unchanged. These objectives include fiscal consolidation, revenue enhancement, expenditure control, stable inflation maintenance, reserve accumulation, and financial stability.

However, Weerasinghe emphasized that the methods to achieve these objectives may vary and undergo revisions with each review.

He pointed out that adjustments have been made in every document from the first review to the next, as the process involves continuous evaluation and adaptation to the prevailing economic conditions.

The Governor stressed the importance of restoring debt sustainability in the medium and long term, ensuring reasonable economic growth, fiscal sustainability, and monetary stability.

Weerasinghe clarified that while there are ongoing reviews and adjustments, the overall direction of the program remains consistent.