New Governor of Sri Lanka’s Central Bank, Indrajit Coomaraswamy assumed office on Monday, replacing Arjuna Mahendran whose 17th month tenure was clouded with allegations of insider trading in Treasury bonds.
Dr. Coomaraswamy, a distinguished economist with Central Bank, Finance Ministry and London-based Commonwealth Secretariat experience, received his appointment letter from President Maithripala Sirisena on Monday morning and then moved to the headquarters of the banking regulator where he was welcomed.
The new Governor has a daunting task of restoring the credibility of the bank and also in uplifting the morale of its staff many of whom felt victimized by the former two Governors. Unlike the previous two incumbents – Ajit Nivard Cabraal and Mahendran who were political appointees (apart from their academic qualifications) -, Dr. Coomaraswamy was selected purely on his academic achievements. However his association with Sri Lankan-born hedge fund trader Raj Rajaratnam, jailed in 2011 for securities fraud in the US, could raise some issues. The new Governor was a special advisor to the controversial Galleon Group hedge fund headed by Rajaratnam and also a director of a connected British company called Galleon Research Services Ltd.
The new appointment is a compromise after a tug-of-war between the President (who preferred Deputy Governor Nandalal Weerasinghe) and Prime Minister Ranil Wickremesinghe who wanted to re-appoint Mahendran if he was cleared of wrongdoing in an ongoing parliamentary probe in a tainted bond issue and Charitha Ratwatte as a stop-gap appointment.
The Ceylon Chamber of Commerce welcomed the appointment and urged all stakeholders to support efforts to restore confidence at the bank.
“The new Central Bank Governor is recognized for his ability to communicate complex economic issues to non-expert audiences, distill the effects of international economic events to their relevance for Sri Lanka, and provide an informed perspective of the opportunities and challenges emerging for the Sri Lankan economy,” it said, adding: “Dr. Coomaraswamy’s integrity, international experience, and formidable intellect are invaluable at a time when Sri Lanka seeks to expand its global footprint and is exposed to international capital markets more than ever before.” - ENDS -
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