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Monday, April 22, 2024

House must inquire why Central Bank failed to notify economic crisis – Minister Bandula Gunawardena

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Transport, Highways and Mass Media Minister Dr. Bandula Gunawardena yesterday (1) observed that the House should inquire if the Central Bank of Sri Lanka informed the House about the economic crisis in advance.

Dr.Gunawardena was responding to the Chief Organizer of the Opposition Lakshman Kiriella who noted in Parliament yesterday (1) that the CBSL has neglected its responsibility to inform the House of the impending economic crisis.

Dr. Gunawardena noted, “As the representative of the Government, the Public Debt Department fulfills the constitutional responsibility of managing the public debt held by the Central Bank in terms of Section 113 of the Monetary Law Act. According to Article 113, the constitutional responsibility of public debt management is assigned to the Central Bank. Accordingly, on August 28,1950, with the establishment of the Central Bank, the Public Debt Department was established.”

“The strategic priority of the Public Debt Department is to ensure that public finance requirements are met in accordance with the optimal standards prevailing in the public securities market at minimum cost, in medium to long term, while maintaining a prudent level of risk. It should analyze the behavior of the loan portfolio to manage the risky debt and communicating it properly to the relevant stakeholders.”

“This function has been assigned to the Central Bank by this House in the Monetary Law Act. So when the full power of the finance is assigned to the Parliament by the Constitution, the Central Bank has to present facts about this to the House. It was not presented that way,” Dr.Gunawardena observed.

“Finally, after the situation got worse, then Finance Minister Ali Sabry came to this assembly and made a full statement about the situation in the country, and then he sought the assistance of the IMF. Minister Sabry explained the situation on behalf of the government to the House. The parliament has to inquire whether the Central Bank fulfilled its responsibility.” Dr. Gunawardena said.

Gunawardena responded to Kiriella who told the House that the Central Bank of Sri Lanka did not inform the House when its dollar reserves dropped from USD 7800 mn to USD 20 mn.

Samagi Janabalawegaya MP Lakshman Kiriella made this observation joining the second day of the three day debate on the Interim Budget.

Kiriella pointed out that it was CBSL’s responsibility to inform such a vital predicament to the House which was neglected.

MP Kiriella told the House, “Yesterday the Governor of the Central Bank came to the Parliament to give a speech. He said that when he took office, the Central Bank had only 20 million dollars. 20 million is the cost of one day in our country. I asked him if he informed the Parliament about this situation? When we handed over the country, we handed over 7800 million dollars. When this amount is reduced to 20 million, it is a very dangerous situation. But no notification has been given to the Parliament. I asked the Governor of the Central Bank about this. When I asked him this question, he became angry. Don’t we have the right to know about this money? He didn’t give a proper answer.”

Kiriella pointed out, “The Central Bank and the Monetary Board have made a huge mistake. Someone from the ruling party should ask him why he did not inform the Parliament. In fact, the President or the Prime Minister of the previous government did not say that the country was bankrupt. Only media said that. The central bank has acted without responsibility. Even during the war, about 500 to 600 million dollars came from foreign workers a year. Today it is down to 1.5 million dollars. The government is talking about investments, but they don’t bring in the money of our foreign workers. Why? I am not sure. I am asking the government to make arrangements to bring this money, if we can do that, we can find our monthly expenses.”

“Looking at this budget, even our MPs say that this is our policy. During the Yahapalana government, not a single institution was restructured. How can you say that restructuring is our policy? People’s Alliance ruled the country for about 15 years, the estate companies were restructured by President Chandrika Kumaratunga, not us. 52 institutions have been listed for restructuring. Can this be done? About 100,000 employees are working in these institutions. We ask the government to protect the rights of employees and prepare a system within the state machinery to solve this issue.” Kiriella observed.

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