Friday, 17 July 2020 07:37

World Bank downgrading of Sri Lanka status was ‘of symbolic value ’:CB Governor

The World Bank’s recent action of downgrading the status of Sri Lanka to lower-middle income group from upper-middle income grade was mainly based on the country’s per capita income and such classifications doesn’t indicate the actual situation of countries, Central Bank (CB) Governor Prof. W.D. Lakshman has emphasised.

Addressing the CB’s monthly monetary policy review media briefing in Colombo on Thursday, he noted that such categorisation of figurative nature could be reversed by accomplishing sustainable growth focusing on economic reforms.

Prof. Lakshman noted that while an increase in inflation could be anticipated in the upcoming months, inflation expectations remained well-anchored.

He dispelled the fear of the overheating of the economy as there was adequate liquidity in the system. He further stated that they are pressurising banks to pass on the rate cuts to borrowers without any further delay.

“Currently, there is a committee appointed comprising Central Bank officials to find out reasons for preventing them from extending loans as determined by the Central Bank and why they’re not responding adequately to interest rate cuts and why they’re not giving loans as permitted by the improved liquidity conditions,’ he revealed.

Explaining the reasons behind the recent ‘bashing’ of CB officials by President Gotabaya Rajapaksa, the Governor noted that before the meeting with the President, measures have been taken in accordance with the legal procedure of the Central Bank to provide a refinancing facility and introduce a rate adjustment.

(LIN)

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