Newly-appointed Governor of the Central Bank of Sri Lanka (CBSL), Dr. P. Nandalal Weerasinghe, yesterday gave the country’s rulers a two-week ultimatum to ensure political stability and implement the rapid economic recovery process with the assistance of the International Monetary Fund (IMF).
“Otherwise, I might consider stepping down as the Governor,” he threatened, addressing a Media briefing at CBSL Headquarters.
“It is not about me. Even if another person comes to this position, he won’t be able to handle the current crisis.”
He said he has already informed his intention to all political leaders of the country.
Dr. Weerasinghe assumed duties as the 17th Governor of the CBSL on 9 April 2022 following the quick exit of two previous governors within a two-year period.
He says the situation in the country has worsened since last Monday than when he took over as CBSL Governor.
He therefore stressed the need to establish law and order in the country and ensure political stability to prevent further deterioration of the economy.
As soon as he became the CBSL Governor, he increased the country’s policy interest rates and announced the debt standstill.
He further said changes should be made in the fiscal policy of the Government. Accordingly, electricity price reforms and tax reforms should be introduced.
He also said the prevailing situation would not interfere with the ongoing technical level discussions with the IMF.
However, he said political stability in the country and fiscal reforms were essential for the policy level discussions to begin with the IMF in the coming weeks.
Therefore, he urged the President and all parliamentarians to come forward in a democratic and constitutional manner and establish much-needed political stability within a short period of time to avoid further eroding the economy.
“The economic situation in the country will become worse if political stability is not established soon. Therefore, establishing political stability in the country is a must to rebuild the ailing economy,” he said.
The CBSL Governor also said the prevailing situation, the acts of violence and the failure to maintain law and order in the country, will in no way help Sri Lanka to get out of its current economic crisis.
He emphasised the importance of a stable government in the country for fast economic recovery through international assistance.
“As the CBSL, we have to state that if such a stable condition cannot be achieved within a very short period of time, the existing situation would worsen further,” he said.
“We, the CBSL hope there will be political stability sooner and as a result, we will be able to get back to our normal policy implementing work, so that we can at least find some foreign exchange to address these current shortages of essentials.”
According to him, even now there is a shortage of certain essential items, while fuel and gas stocks are available to a certain extent at this moment and power cuts are limited to a few hours.
However, if this situation continues for another few days, the country can expect the durations of power cuts to return to over 10 hours once again and for much severe shortages of fuel and more queues for gas cylinders, leading to more protests and public outbursts, the Governor warned.
By Ishara Gamage