CB Governor predicts lesser economic impact from present pandemic surge

Dispelling expert views of a severe impact on the economy in the third wave of the pandemic, Central Bank Governor W.D. Lakshman says that the economic impact of the rising contagion is less than the two previous attacks.

Addressing the monetary policy review media conference online, on Thursday, he noted that restriction of mobility in affected areas, ongoing vaccination programme and employees working from home will mitigate the impact.

He noted that the country's economy is untouchable although government tax revenue, public expenditure and exports could be disrupted by the pandemic.   

The Central Bank is continuing the maintenance of the current accommodative monetary policy stance to support the sustained revival of the economy.

He emphasised the need of continuing fiscal and monetary support to place the recovery process on a firm footing.

Inflation is expected to remain broadly within the desired target range of 4-6 per cent during the remainder of the year.

Sri Lanka is exploring several options to improve the external sector, he said revealing that another agreement will be signed for a swap facility with the People’s Bank of China.

Negotiations are underway with neighbouring central banks and West Asian counterparts; he said adding that an IMF facility of US $780 million is also expected.

The China Development Bank has already provided a US$500 million loan while Colombo Port City Commission will attract more foreign investment in to the country, he added. (BS)