In the wake of the current crippling economic crisis, it has become necessary to implement not only tightened monetary policy but also Government’s fiscal policy along with the economic and structural reforms concurrently, Central Bank (CB) Governor Dr, Nandalal Weerasinghe said. He told a media briefing in Colombo on Thursday that the present critical economic [...]

Business Times

CB chief stresses need for fiscal and monetary measures

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In the wake of the current crippling economic crisis, it has become necessary to implement not only tightened monetary policy but also Government’s fiscal policy along with the economic and structural reforms concurrently, Central Bank (CB) Governor Dr, Nandalal Weerasinghe said.

He told a media briefing in Colombo on Thursday that the present critical economic situation could be settled by tackling all macroeconomic imbalances with prudent monetary and fiscal policies and taking prompt action to implement necessary structural adjustments and economic reforms jointly with all state agencies.

Dr. Weerasinghe said that the CB cannot handle all the economic issues alone and it needs the joint efforts of the fiscal authority and other relevant state agencies’ firm support adhering strictly to the policy decisions.

He disclosed that the policy adjustments announced in the export and import sector recorded some improvement with the narrowing trade gap to a certain extent but easing the open account transaction for certain essential commodity sectors due to some outside pressure may open dollar trading in the black market again.

Ever increasing inflation is expected soar to a new high of 70 per cent from the present 54.6 per cent and its ill affects to the poor and vulnerable sector should be handled by implementing social security network and welfare programmes such as increasing Samurdhi benefits, he added.

He revealed that the CB has issued guidelines to provide concessions and relief for individuals as well as micro, small and medium scale entrepreneurs extending the debt moratorium till December this year subject to certain conditions and considering requests on a case by case basis.

Talks with the IMF are continuing virtually and most of their expectations are being met, he said expressing confidence that a staff level agreement will be reached within a short period of time.

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