CBSL Governor expresses desire for six-year term

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Central Bank governor P Nandalal Weerasinghe has expressed his desire to continue in his post amidst uncertainty about whether he will be reappointed for a full six-year term at the end of this month.

Speaking to BBC Newsnight, he said “I don’t think when I took over I had the expectation I would be serving only for two months and go back. If that was the situation, I would not [have] come in… This is not something that can be addressed within two months. It will get worse before it getting better.”

Former CBSL staff have written an open letter to the embattled President Gotabaya Rajapaksa urging him to keep Weerasinghe in the post.

“If anyone is contemplating to remove him from his position as the Governor of the Central Bank of Sri Lanka, we see it as a highly unpatriotic move with entirely ulterior motives,” they wrote.

Commenting on the prevailing situation in the country, Weerasinghe claimed that Sri Lanka is experiencing its worst economic crisis since independence from Britain in 1948 and said the country could have avoided the economic turmoil if it had gone to the International Monetary Fund (IMF) for a bailout sooner.

Weerasinghe said that the delay in seeking outside help was a mistake.

The country has said it needs $5 billion this year in support from the international community, including the IMF.

Sri Lanka defaulted on its foreign debt for the time in its history last month.

“If we had taken the decision to go to the IMF earlier, if we started the debt resettlement process one year before, we could have managed the situation without this kind of suffering in this country,” he said.

His comments came as he is attempting to restore order to Sri Lanka’s economy, which is experiencing extreme fuel shortages, soaring food prices and a lack of medicines.

A recent survey by the United Nations World Food Programme found that around two-thirds of Sri Lankan households have been forced to reduce their food intake.

A team from the IMF is due to arrive in Colombo for talks on Monday and Weerasinghe will be a key participant in those meetings.

A complication in the IMF negotiations is Sri Lanka’s substantial borrowing from China, which Weerasinghe said accounts for 15% of the country’s total external debt.

The fund has a policy of not bailing out countries unless all its other creditors have first agreed to write down their loans.

“I’m sure China as a good friend of Sri Lanka [will] offer similar relief that will be offered by other creditors as well,” said Weerasinghe.

The World Bank has warned that as many as 12 other developing countries are at risk of default over the coming year.

Analysts say states such as the Maldives, Rwanda, Ethiopia, Senegal are also all on the financial brink.

Egypt, Ghana and Pakistan are also seen as intensely vulnerable.