Central Bank says no significant increase in money printing
The Central Bank of Sri Lanka (CBSL) yesterday said despite the media reports on increased money printing to help finance the government’s fiscal commitments, the monetary authority is well within its projections for this year, in terms of expanding the monetary base.
The CBSL said reserve money, which was at Rs.939.8 billion at end2017 and at Rs.1,010.5 billion at end-september 2018, was recorded at Rs.1,020.8 billion on November 2, 2018.
“This is a year-on-year growth in reserve money of 11.6 percent, which is well within the CBSL projections for the year,” the Central Bank said.
Usually, money printing refers to the expansion of reserve money (monetary base).
Meanwhile, the CBSL said rupee liquidity in the domestic money market has been in deficit since midseptember 2018, requiring them to conduct open market operations (OMOS) to provide adequate liquidity to the market, in addition to allowing market participants access to standing facilities at policy interest rates.
“In view of the large and long-term shortages of liquidity in the market, the CBSL conducted longerterm reverse repurchase auctions and made outright purchases of government securities mainly from the secondary market.
These are regular monetary operations with market participants, which have no relevance to the government’s fiscal position or any particular political event,” the CBSL stressed.
“As a result of such OMOS, the net book value of the treasury bill holdings of the CBSL (gross book value of treasury bills plus total value of reverse repos and standing lending facilities minus repos with the CBSL) was recorded at Rs.224.4 billion on November 2, 2018.
This exposure helped him to gain his expertise knowledge and experience in both fiscal and monetary policy.
Attygalle also served as Chairman of the National Savings Bank and represented the Treasury on the boards of several key state-owned enterprises and statutory boards, including Bank of Ceylon, National Savings Bank, Airport and Aviation Services (Sri Lanka) Limited, the Sri Lanka Ports Authority, Securities and Exchange Commission of Sri Lanka and Insurance Board of Sri Lanka.
He has also represented the Treasury in key committees appointed by the Cabinet of Ministers, such as the head of the technical team negotiating the free trade agreement with China.
Meanwhile, Karunaratne has over 32 years of experience in the CBSL, especially in the areas of economic and price stability, financial system stability and other agency functions carried out by the CBSL.
Prior to the appointment as a Deputy Governor, Karunaratne held the position of Assistant Governor in-charge of the Employees’ Provident Fund, Risk Management and Secretariat Departments and supervised the administrative matters of the Financial Intelligence Unit.
In addition, Karunaratne served as Secretary to the Monetary Board of the CBSL for nearly four years.
He also served as Secretary to the Monetary Board Advisory Audit Committee, Secretary to the Board Risk Oversight Committee, Secretary to the Ethics Committee and Head of the Secretariat of the Whistleblowing Policy of the CBSL.
Karunaratne holds a Master of Arts Degree in Economics from Ohio University, USA and a Bachelor of Science Degree in Business Administration from the University of Sri Jayewardenepura. He is an Associate Member of the Institute of Chartered Accountants of Sri Lanka.
Karunaratne currently serves as Vice Chairman of the Institute of Bankers of Sri Lanka (IBSL) and Chairman of the Audit Committee of the IBSL. He has made a significant contribution towards achieving the core objectives of the CBSL through his vast knowledge and experience locally as well as overseas, especially in the areas of reserve management, debt management, securities markets, risk management and financial intelligence.
He has also published several research articles on the topics of reserve management, government debt securities market, derivative markets and primary dealer systems.