SL set to overcome economic imbalances
Sri Lanka is taking corrective steps to fix economic imbalances,
senior economists said.
Sri Lanka has taken corrective steps to counter a balance of payments
crisis triggered by a credit bubble worsened by energy price
manipulation and state enterprise losses, economists at an interactive
forum on 'Flexible Exchange Rates' organized by Ceylon Chamber of
Commerce held on Tuesday in Colombo said.
While endorsing the recent policy decisions on exchange rate, fuel
pricing and interest rates, Economist Dr. W.A. Wijewardena said that the
tightening of monetary policy is necessary for the country to move
This will be a painful path for the exporters. However, attention
should be paid to continue current policies despite their challenging
nature. This will ensure beneficial results that policy changes are
expected to bring to the economy, he said.
The export fraternity should take these changes in to consideration
especially the cost of electricity and fuel price increases and adjust
themselves. These will payback in the long run as massive adjustments
are necessary on the cost front, he said.
In February authorities allowed the rupee to fall to match underlying
loose monetary conditions and raised both energy prices ending price
deceptions and also interest rates.