FIU submits recent suspicious financial transaction reports to CID
The Central Bank has reduced its interest rates loosening the monetary policy by considering current trends in global financial markets, trade balance, and credit growth in the country while strengthening the Financial Intelligence Unit (FIU) activities in countering the financing of terrorism.
The FIU has conducted many investigations into money laundering and terrorist funding and relevant findings after comprehensive analysis on such cases had been handed over to CID for further investigation and necessary action, Central Bank Governor Dr. Indrajit Coomaraswamy revealed.
He was responding to a question raised by a journalist on foreign exchange flows to Sri Lanka via illegal channels at the media conference convened to brief monetary policy review in Colombo on Friday.
H. A. Karunaratne, Deputy Governor of the Central Bank noted that an FIU official attended the previous National Security Council meetings sometime back but were not invited for recent meetings.
The CID should be able to track quite easily where the funds went to following FIU reports, he said.
The Monetary Board of the Central Bank, at its meeting held on May 30 decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 50 basis points to 7.50 per cent and 8.50 per cent, respectively.
Dr. Coomaraswamy said that the banks have been asked to bring down lending rates soon to boost economic activity but this process has not been expedited.
He said lending rates have not been reduced promptly by banks and if the situation prevails further the authorities will have to impose a cap on lending rates as it is also trying to bring down bank deposit rates.
Sri Lanka is expected to raise US$ 4.5 billion in foreign borrowings in 2019 along with $2 billion external debt servicing in 2020, he said. The cabinet has already approved $ 2.5 billion in sovereign bonds for cash flow requirements in 2019 budget.
Sri Lanka will borrow around $2 billion additionally in accordance with the provisions of Active Liability Management Act of 2018 (ALMA).
The Treasury will be expected to borrow around Rs. 480 billion and the entire amount would be in US dollars and rupees, he added.
Dr. Coomaraswamy said the Central Bank will seek Cabinet approval within the next two weeks for debt servicing in 2020 where there will be an international sovereign bond maturity in October next year.