Exception to the rule: Ex-CB Governor at Market Operation Committee meeting

Former Central Bank Governor Arjun Mahendran was present at the Market Operation Committee meeting held on February 27, 2015, Monetary Board Secretary H.A. Karunaratne said.

He said it was unusual for a Central Bank Governor to be present at a Market Operation Committee (MOC) meeting.

Asked if it was usual for former Governor Mahendran to attend such meetings, Karunaratne said it was not the case.

Karunaratne said the former Governor wanted to discuss overnight deposit interest rates and the 2tier system. He said Mahendran instructed to make changes to a circular to abolish the 2tier system and to raise the interest rates.

“Mahendran said that keeping a fixed 5 percent interest rate is suppressive and that it would not draw a clear picture of the market,” Karunaratne said.

MOC members include Assistant Governors in charge of Economic Policy and Market Operations, Head of the Economic Research Department and the Director of the International Operation Department. 

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