Courtesy AdaDerana

The new Central Bank Act, aimed at bolstering the bank’s independence, accountability and price stability in the country, comes into effect today (15 Sep.), Acting Minister of Finance Ranjith Siyambalapitiya said.

Accordingly, the Acting Minister explained that as per the new Act, the Central Bank of Sri Lanka’s (CBSL) ability to print money will be limited, as opposed to their manners of printing money, rather excessively, in the recent past.

He emphasised that such money printing would be allowed only under special circumstances, such as a concern of national security or a global health crisis, adding that only an amount not exceeding 5% of the value of the issued Treasury Bills can be printed.

Siyamabalapitiya further explained that the CBSL will now be required to work towards achieving the set inflation target, and in the event it fails to do so, it will be required to explain why.

Meanwhile, with regards to appointments to the General Board of Governors of CBSL, Siyambalapitiya emphasised that the Treasury Secretary will no longer be involved in this process. He added that the qualifications required for such appointments have also been listed in the new CBSL Act, while all such appointments will require approval from the Constitutional Council.