Top visiting IMF official says flexible exchange policy must continue

A top visiting International Monetary Fund (IMF) said this week he expects Sri Lanka to continue its flexible exchange rate regime, allowing it to serve as a key buffer against external shocks, while reserves are allowed to rise to more comfortable level.

According to statement issued by the local IMF office, IMF Deputy Managing Director Naoyuki Shinohara said at the conclusion of his visit to Sri Lanka that in terms of macroeconomic management, he highlighted the importance of pursuing a cautious monetary policy, keeping in mind Sri Lanka’s past challenges with inflation, the risks posed by “Fed (Central Bank) tapering, and the need to assess the impact of monetary easing already undertaken”.

He said in his meetings with Senior Minister Sarath Amunugama, Treasury Secretary and Central Bank Governor, he had commended the authorities for delivering strong growth, low inflation, fiscal consolidation, and a strengthening of the external accounts since the end of the war in 2009.

“Our discussions focused on how to accelerate and sustain growth, ensure macroeconomic and financial stability, and take advantage of regional and global integration.

Fiscal consolidation has been steady, and the authorities are committed to further reduce the budget deficit and public debt, which remain relatively high.

In this context, I support the authorities’ efforts to boost revenues by broadening the tax base and strengthening tax administration—creating opportunities to further reduce the deficit while raising public investment. Private investment, including FDI, could be supported through improvements in the business environment and a broad dialogue with stakeholders. Finally, I noted that a strong outward orientation has supported rapid growth in key Asian economies and remains an appropriate strategy for Sri Lanka,” he added.

According to statement issued by the local IMF office, IMF Deputy Managing Director Naoyuki Shinohara said at the conclusion of his visit to Sri Lanka that in terms of macroeconomic management, he highlighted the importance of pursuing a cautious monetary policy, keeping in mind Sri Lanka’s past challenges with inflation, the risks posed by “Fed (Central Bank) tapering, and the need to assess the impact of monetary easing already undertaken’’

BBDO Lanka continued its ‘Force For Good campaign’ and contributing to the Commonwealth Business Forum held in Colombo as a key sponsor. It also launched www.bbdoforchogm.com, a website to provide information to the participants about its ‘Force For Good’ initiatives. BBDO Lanka Managing Director Santosh Menon said in a media release that they “were delighted that the Commonwealth Business Forum was being held in Sri Lanka. Last year we hosted the CII (Confed- eration of Indian Industry) delegation that visited Sri Lanka and promoted Sri Lanka as an investment destination”.

He said the conference was a fantastic opportunity for everyone. “Delegates from the Commonwealth and further afield got the opportunity to see the amazing potential for business in Sri Lanka, the business community was able to expand their networks and we were able to help support the vision of the state. It has been an inspiring week for all,” he said.