CBSL differs $300 mn payment to B’desh CB

The Central Bank of Sri Lanka ((CBSL) was able to differ the payment of USD 300 million due in May 2022 to the Central Bank of Bangladesh.

Governor CBSL Dr. Nandalal Weerasinghe yesterday at a press conference in Colombo said that he spoke to the Governor of Central Bank of Bangladesh and was successful in ‘extending the maturity period of this for a further period.

The governor said that the current political stalemate and unrest in the country would not have a negative impact on the ongoing negations with IMF. “We have also requested more credit from several donors including ADB agencies and these too would materialize despite the unsettled situation in Sri Lanka. We expect around USD 600 million from these sources soon.”

He also said that he had also talked to representatives of all banks and several guidelines were spelt out at this meeting ensuring stability of the banking system. “We will also immediately take step to stabilize the interbank rates.”

He said that for the economy to bounce back political stability is a must and said political leaders should come to a settlement in this regard and create a stable government. “However how much we do towards stabilizing the economy would not work without a political settlement.”

The governor said that when he took over the reins of the CBSL governor the economy was noose diving and he immediately used several financial tools to put brakes to it. “I was able to stop the economy descending but without political stability it would start to decent even faster.”

The government needs fiancés not only to import fuel, gas, medicine and other essentials but also to keep the economy going and pay salaries and manage other welfare measures. The government in 2019 pruned several taxes and billions of revenue due via taxes which deprived the government colossal revenue . We need a government soon to start implementing these taxes and increase government revenue.”

He also said that the SME sector too would have to bear with them for some time as there would be a dip of economic activity especially in industries and service sectors due to import restrictions and other concerns.

He said that today there is a less demand for cement since the prices have gone up and this will help to reduce the cement import bill to some extent.

He also appealed from exporters who are now ‘getting more’ for their exports due to the depreciating rupee to use formal channels to put back the dollars to the banking system.

He once again made the similar request from expatriate workers to send their remittances through he banking system and not via informal channels.