Blamed for current crisis, Monetary Board before House Committee today

By Shamindra Ferdinando

Chairman of the Committee on Public Finance (CoPF) Anura Priyadarshana Yapa, MP, says they’ll inquire into the possibility of bringing former Governor of the Central Bank Ajith Nivard Cabraal before the Watchdog Committee inquiring into the conduct of the Monetary Board pertaining to the current crisis.

Governor, CBSL chairs the five-member Monetary Board.

Cabraal, who succeeded Prof. W.A. Lakshman as Governor, CBSL, in Sept last year, announced his resignation on Monday (04) with the resignation of virtually the entire Cabinet as the economic crisis triggered political mayhem with unprecedented protests that began with one outside President Gotabaya Rajapaksa’s residence at Mirihana.

SLPP lawmaker Yapa said that the Monetary Board members were scheduled to appear before the CoPF today (06).

Earlier, the Monetary Board was scheduled to appear before the CoPF on March 21. It was later rescheduled for March 24 but at the last moment, the CBSL informed the CoPF that the entire Monetary Board couldn’t attend the meeting as board member S. R. Attygalle, Secretary to the Ministry of Finance, was to hold discussions with the World Bank on that day.

Subsequently, the CoPF tried to arrange the meeting scheduled for April 01.

The Monetary Board consists of the Governor of the Central Bank (ex-officio), Treasury Secretary S.R. Attygalle (ex-officio), President’s Counsel Sanjeeva Jayawardena, Dr. Rani Jayamaha and Samantha Kumarasinghe.

Recently, former Deputy Governor of the Central Bank Dr. W.A. Wijewardena in a brief interview with The Island asserted that the country wouldn’t have landed in the current predicament if the Central Bank floated the Rupee in April 2021 during the tenure of Prof W.D. Lakshman as the Governor of the Central Bank.

Dr. Wijewardena said that the current crisis should be studied against the backdrop of the CBSL delaying the depreciation of the rupee till early March this year.

CoPF member Dr. Harsha de Silva said that Cabraal, who had served as the State Finance Minister before receiving the appointment as Governor, CBSL, quit the job within six months. Lawmaker de Silva asked what had happened to the former Governor’s six-month road map (Oct 2021-March 2022) meant to pave the way for economic recovery.

Alleging that the Monetary Board was responsible for the current predicament of the country, the former UNP State Minister said that the Monetary Board should be removed. The Colombo District lawmaker emphasised that the Monetary Board couldn’t absolve itself of the responsibility as all decisions taken by the outfit proved wrong.

MP de Silva said that the Monetary Board couldn’t be silent on the government’s failure to initiate talks with the IMF early last year when the SJB led the calls for IMF’s intervention. The MP emphasised that the government repeatedly rejected the SJB’s calls for IMF intervention. Dr. P. B. Jayasundera, former Secretary to President Gotabaya Rajapaksa, too, steadfastly opposed IMF’s intervention.

Former Senior Deputy Governor of the Central Bank Nandalal Weerasinghe, now domiciled in Australia, has been approached by the government to take over the position of Central Bank Governor.

Former Governor of the CBSL, Dr. Indrajith Coomaraswamy would help the government in an advisory capacity. Sources said so when asked whether Dr. Coomaraswamy would be accommodated in some relevant capacity to assist the government.