CB Governor says Sri Lankan economy on even keel
Central Bank Governor Arjuna Mahendran this week assured the Sri Lankan public that the country’s economy is in an even keel with strong and robust growth performances, trade deficit not growing sharply and imports have been relatively contained. However at Monday’s briefing, called a day after a Sunday Times report of rumblings of discontent at the banking regulator over transfers, reporters on-and-off fired questions on these issues and alleged phone tapping.
Arjuna Mahendran at the biefing
Explaining the economic and financial situation of the country, Mr. Mahendran said that with a lower trade deposit external sector performances were improved. The flexibility allowed in the exchange rate is expected to help reduce further the trade deficit while improving the country’s gross official reserves leading to external sector stability. He said that the US dollar continued to get strengthened and the other currencies adjusted accordingly. He said that like other currencies in emerging markets, the Sri Lankan currency has also adjusted to become slightly weaker against the US dollar.
He said that if the credit growth of the private sector continues to grow faster they would consider a rate hike as the Finance Ministry has informed the Central Bank about this credit growth.The Governor, when asked about the Sunday Times report, said it was a complete distortion, indicating that senior officials are transferred routinely among the 30 departments when they stay in one place for three to five years. At this point a journalist appeared to ‘correct’ the response saying that some officers who were less than six months in their positions had also been transferred.
Referring to a Tuesday meeting between senior officials amongst themselves where a disagreement arose when the Governor walked into the room, Mr. Mahendran denied saying he “had a (cordial) meeting with senior staff.” However this newspaper stands by its story that there was disagreement at the meeting and that the discussion was meant to be among officials sans the Governor.
It was also pointed out that dealers do not want to contact the media as these dealers feared that conversations are listened to and recorded by the Central Bank. Mr. Mahendran denied that such things were happening.