CBSL sustained economic stability during lockdown | Daily News


 

CBSL sustained economic stability during lockdown

Actively took steps to ease burden on general public:

The Central Bank of Sri Lanka says that it has taken several operational and policy measures to support the economy, the financial system and the general public in the midst of the COVID-19 pandemic.

Following is an extract of the statement.

The Central Bank actively took stepsto ease the burden on the general public during this unprecedented disruption of global scale, while preserving the focus on its legal mandate to maintain economic, price and financial system stability.

These include, but are not limited to, the following measures: 1. Reduce interest rates, enhance market liquidity, and finance the government, 2. Manage foreign exchange flows, maintain exchange rate stability and preserve international reserves, 3. Maintain financial system stability and enhance credit flows,4. Ensure uninterrupted currency operations and payments and settlements activities, and 5. Manage the public debt.

Measures to reduce interest rates, enhance market liquidity, and finance the government were aimed at supporting economic activity in the context of a low inflation environment.

The Central Bank also provided required financing to the government to overcome fiscal stresses arising from the shortfall in government revenue and increased expenditure.

The Central Bank took several steps to maintain a stable exchange rate under extremely difficult conditions without a loss of international reserves to defend the exchange rate. Effects of COVID-19 resulted in large capital outflows, and limited export revenues, earnings from tourism, and workers’ remittances.

Measures have also been put in place to provide liquidity support to any distressed financial institution as and when a need arises.

The Central Bank took measures to ensure a smooth flow of currency required by the economy during the lockdown period. These measures allowed the general public to fulfil their currency requirements through bank branches and automated teller machines (ATMs) even during the curfew periods. The Central Bank maintained Sri Lanka’s impeccable record of timely debt service payments during the ongoing stress situation. Regular interactions with foreign counterparts were held to preserve investor confidence in the Sri Lankan economy.

Several policy and operational measures were taken by the Central Bank during the COVID-19 Pandemic to support economic activity. These included measures to reduce interest rates, enhance market liquidity, and finance the Government. CBSL also took measures to manage foreign exchange flows, maintain exchange rate stability and preserve international reserves. Several measures to ensure uninterrupted currency operations and payments and settlements systems and manage the public debt and ensure uninterrupted debt service payments were also taken.

All the masseurs taken by the CBSL can be viewed at https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/press/pr/p...

 


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