Central Bank union says IMF discussions must continue under regime change

The Central Bank Executive Officers’ Union (CBEOU) said on Monday that whichever party comes to power, it should continue discussions with the International Monetary Fund (IMF) and finalise an agreement to save the country.

“… we strongly believe that any party that comes to power in the future will not hinder this process of reaching an agreement with the IMF, which is the primary way to save the economy from this calamity,” the union said in a statement urging, as required by protestors, for the President and the Prime Minister to step down.

It said several rounds of technical discussions have been held with the IMF thus far, and a staff-level agreement is close to being reached.

Also, necessary activities are underway for debt restructuring, which is a prerequisite for an Extended Fund Facility that to be obtained from the IMF. Furthermore, the IMF has already emphasised that in order to continue the program, political stability must be established in the country very soon, the statement said.

The union expressed its fullest support to the people’s movement held on Saturday against a ‘futile regime’ which should be directly responsible for destroying the Sri Lankan economy.

“Today, we as a country are experiencing the adverse consequences of mismanagement of the economy mainly based on narrow political agendas, aside from the professional and technical advice of Central Bank officials,” it said.

Due to lack of progressive political vision, weak political leadership and political instability, Sri Lanka has found it difficult to get any kind of financial support from the international community and as a result, the present and future of the entire country is faced with tragic consequences.

“Even under such a situation, we believe that the Central Bank of Sri Lanka has taken all possible efforts that are within its scope to prevent the economy from collapsing and will take the necessary policy measures in accordance with the future developments in the economy. Nevertheless, it must be emphasised that the Central Bank of Sri Lanka alone cannot get the country out of this economic crisis,” it said.

The Central Bank of Sri Lanka cannot find sustainable solutions to the existing economic crisis through monetary policy in isolation, and for that the government must make necessary structural changes in the fiscal policy and especially when the economy is on the verge of a severe collapse, all relevant economic policies should be implemented with a strong coordination between the monetary and fiscal policy.