SL mulls introducing new monetary law to streamline CB’S functions
The government has resumed its efforts to restructure the Central Bank after months of silence on the matter, with Prime Minister Ranil Wickremesinghe announcing that discussions are ongoing to introduce a new monetary law.
“We’re now discussing a new monetary law, which will have the Central Bank focusing on essential items and not being involved in peripheral activities. That’s the first issue,” he said yesterday while delivering the keynote address at the International Organisation of Securities Commission’s (IOSCO) Growth and Emerging Markets Committee Annual Conference.
Past attempts at restructuring— started in 2016—were focused on clipping the Central Bank’s wings.
This generated an outpouring of support for the Central Bank from economists and other professionals late last year and early this year and Central Bank Governor Dr. Indrajit Coomaraswamy rode this wave of support this January to call for even greater powers to be bestowed upon his institution under collaborative reforms.
It is not yet clear whether the new monetary law Wickremesinghe spoke of is formulated collaboratively with the Central Bank. Attempts to reach several key Central Bank officials to gain confirmation were unsuccessful.
The past campaign to limit the Central Bank’s functions seemed to have lost its steam due to public opposition and the exit of the campaign’s main general—former Finance Minister Ravi Karunanayake.
Karunanayake too, similar to Wickremesinghe, had remained ambiguous on exactly which Central Bank functions would be removed from the monetary sector regulator.