New law drafted at the behest of IMF to make Central Bank an independent body

By saman Indrajith

Governor of the Central Bank Dr. Nandalal Weerasinghe told MPs on Thursday that a new Bill had been drafted to make the Central Bank an independent institution in line with IMF conditions.The Governor said that banks had been instructed to provide relief to those affected by the increase in bank interest rates.

He also said that given the existing fiscal policies, it would be possible to maintain inflation below five percent by the end of next year and that there was no reason for any inconvenience to be caused when exchanging dollars through bank The Governor said this to the members of the Ministerial Consultative Committee on Finance, Economic Stabilization and National Policies. The meeting was chaired by the State Ministers of Finance Ranjith Siyambalapitiya and Shehan Semasinghe.

MPs said that due to the increase in interest rates, the entire income of some creditors was spent on loan installments. The CBSL Governor said that customers could pay only the interest for a grace period in consultation with the bank. Instructions had been given to the banks on this, he said.

The CBSL Governor said that inflation which was 70 percent two months ago had now decreased to 66% and the food inflation which was at 95% had decreased to 85%. He stated that with the existing fiscal policies, this figure was expected to be under five percent by the end of next year.

State Minister Semasinghe said that according to a report of the Department of Public Enterprises, 22 out of 126 institutions had not submitted their annual reports for more than five years and some institutions have delayed the submission of annual reports for about seven years. Accordingly, the State Minister said that since would have to work with the International Monetary Fund in the future, he had instructed the heads of the institutions to submit the annual reports within the stipulated time.

Leader of the Opposition Sajith Premadasa, Members of the Committee Jagath Kumara Sumithraarachchi, Sahan Pradeep Withana and Parliamentarians, Secretary to the Treasury/Ministry of Finance, Economic Stabilization and National Policies. K M Mahinda Siriwardana, officials representing the Ministry and institutions affiliated to it were present at the Committee meeting.