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Minister once the recommendation is received from the Minister of Finance. The recommendation of the Finance Minister is also required to appoint the Central Bank Governor. Accordingly he will be appointed once the Finance Minister who is presently abroad on an official mission returns to the country and submits his recommendation…..”

Barely an hour after this was issued, Ranga Kalansuriya, Director General of Media at the Government Information Department contacted media outlets and urged them not to use this news release. Evidently, it had been released without the President’s approval. Later on Friday night, Nimal Bopage, Secretary to the Ministry of Media (a nominee of President Sirisena) said in a statement that no media statement has been issued by the Department of Information on the subject of the Governor of the Central Bank.

In remarks he made before the appointment of Dr Coomaraswamy, Premier Wickremesinghe told the Sunday Times, “There is no question of an interim or acting Governor. Such things don’t exist. There is no provision in the law for it.” He said a person should be named for the tenure stipulated in the law -- six years. It was up to him or her to prematurely end their term, he pointed out. He revealed that draft legislation was ready to be introduced in Parliament to bring the Central Bank (among other institutions) under the Ministry of National Policies and Economic Affairs. Then, it would be this Minister (at present the Premier) who will make the recommendation. Wickremesinghe was disappointed that a planned bond issue on Monday did not materialise. He said a new date would be set soon.

Karunanayake summoned

On Thursday, the Prime Minister’s Secretariat was telephoning Karunanayake who was overseas, to ask him to return to Sri Lanka immediately. He was first in Beijing for a meeting of the Asian Infrastructure Investment Bank. Thereafter, he had flown to Tokyo for a meeting of finance ministers. Premier Wickremesinghe spoke to Karunanayake on the telephone to tell him that his presence in Colombo was essential and to cut short his visit. As a result, he will return to Colombo today (Sunday). He was told yesterday there was now no need to rush back.

The fact that a new Governor has been appointed is in itself a significant development. Sirisena has thus shut the door on Mahendran. Earlier, some UNPers believed a new appointee’s term may be limited by arrangement. This assumption was on the basis that the impending report by the Committee on Public Enterprises (COPE), the Parliamentary oversight committee, where the majority are UNP members, would clear Mahendran.

Sirisena loyalists asserted that Dr. Coomaraswamy’s new appointment would be for the next six years, and declared it was a move which sent a strong signal locally and internationally that the President was calling the shots. In doing so, he also makes sure he does not offend the senior SLFP ministers who wanted Mahendran out, said one of them. “Surely, he (the President) will not want to be seen as doing everything the UNP way,” he said. He added “he has to be assertive to strengthen the SLFP and make it a strong force.”

Even before the new CBSL Governor issue aggravated to become a bone of contention between the UNP and the SLFP, a tripartite meeting of the President, the Prime Minister and the Finance Minister was due though not on the same day. This was to discuss further relief measures arising out of the VAT increase that has led to a countrywide campaign by small traders. The campaign is fast gaining momentum. Other far-reaching revolutionary measures to liberalise the economy by lifting controls in many spheres were to be discussed. The Singapore, Hong Kong and Dubai models have been examined. The likelihood of this being announced through a policy statement is not being ruled out. These measures including VAT revisions were to be made public this month. This week there was a lockdown of shops in Anuradhapura, Kandy, Serunuwara, Kiribathgoda and Warakapola.

“Those who are behind the campaign to close shops are opposition politicians against whom probes are under way for bribery or corruption,” Karunanayake told the Sunday Times speaking on the telephone from Tokyo. He said the move to increase the tax base was envisaged to give relief to those affected by the VAT. However, “Joint Opposition” leader Dinesh Gunawardena defended the protests. “We are supporting the consumers and the traders who are badly hit. The VAT was not approved by Parliament. It was not in the budget proposals for which the majority voted,” he told the Sunday Times. He said that the "Joint Opposition" welcomed the appointment of a new Governor, "an experienced professional and respected in his field." He said he hoped the new Governor would restore Central Bank's credibility.

The issue over the CBSL Governor zoomed into a heated controversy on Wednesday. This began with a one line message from President