{"id":150744,"date":"2025-07-17T16:11:28","date_gmt":"2025-07-17T23:11:28","guid":{"rendered":"https:\/\/www.lankaweb.com\/news\/items\/?p=150744"},"modified":"2025-07-17T16:11:28","modified_gmt":"2025-07-17T23:11:28","slug":"behind-the-bailout-how-ranil-wickremesinghe-gave-away-sri-lankas-central-bank-independence-to-imf","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2025\/07\/17\/behind-the-bailout-how-ranil-wickremesinghe-gave-away-sri-lankas-central-bank-independence-to-imf\/","title":{"rendered":"Behind the Bailout: How Ranil Wickremesinghe gave away Sri Lanka\u2019s Central Bank Independence to IMF"},"content":{"rendered":"<h2><span style=\"color: #0000ff;\"><em><strong>Shenali D Waduge<\/strong><\/em><\/span><\/h2>\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"582\" height=\"371\" src=\"https:\/\/www.lankaweb.com\/news\/items\/wp-content\/uploads\/2025\/07\/shenali18o7251R.jpg\" alt=\"\" class=\"wp-image-150746\" srcset=\"https:\/\/www.lankaweb.com\/news\/items\/wp-content\/uploads\/2025\/07\/shenali18o7251R.jpg 582w, https:\/\/www.lankaweb.com\/news\/items\/wp-content\/uploads\/2025\/07\/shenali18o7251R-300x191.jpg 300w\" sizes=\"auto, (max-width: 582px) 100vw, 582px\" \/><\/figure>\n\n\n\n<p>In 2023, as Sri Lanka was reeling from its worst economic crisis in decades, unelected President&nbsp;<strong>Ranil Wickremesinghe&nbsp;<\/strong>agreed to a $3 billion IMF bailout. But hidden inside the loan terms was a&nbsp;<strong>Trojan Horse<\/strong>&nbsp;\u2014 the demand to make the&nbsp;<strong>Central Bank of Sri Lanka independent\u201d<\/strong>&nbsp;from government and parliamentary oversight.<\/p>\n\n\n\n<p>What followed was the&nbsp;<strong>Central Bank of Sri Lanka Act No. 16 of 2023<\/strong>, rushed through Parliament with little public debate or transparency. It&nbsp;<strong>transferred core economic powers<\/strong>&nbsp;from elected leaders to an&nbsp;<strong>insulated technocracy<\/strong>, handing&nbsp;<strong>control over Sri Lanka\u2019s monetary policy to the IMF<\/strong>.<\/p>\n\n\n\n<p>What was dismantled \u2014 and what it cost Sri Lanka<\/p>\n\n\n\n<p>For decades, the Central Bank operated under the&nbsp;<strong>Monetary Law Act No. 58 of 1949<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The<strong>Finance Minister sat on the Monetary Board<\/strong>.<\/li>\n\n\n\n<li>The CBSL could issue<strong>provisional advances to the government<\/strong>.<\/li>\n\n\n\n<li>CBSL leadership was<strong>politically accountable<\/strong>.<\/li>\n\n\n\n<li>Monetary and fiscal policy worked<strong>together<\/strong>\u00a0to promote\u00a0<strong>employment, development, and price stability<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p>This model allowed&nbsp;<strong>governments to respond to national emergencies<\/strong>, support social welfare, and invest in growth.<\/p>\n\n\n\n<p>But the&nbsp;<strong>2023 CBSL Act destroyed this model<\/strong>&nbsp;and installed&nbsp;<strong>IMF-style rules<\/strong>&nbsp;that prioritize creditors, not citizens:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><td>IMF Rule in CBSL Act<\/td><td>Real-World Impact on You<\/td><\/tr><\/thead><tbody><tr><td><strong>Strict inflation targeting<\/strong><\/td><td>Development, employment, and poverty reduction take a backseat. CBSL won\u2019t lower interest rates to stimulate jobs or industry.<\/td><\/tr><tr><td><strong>No deficit financing<\/strong><\/td><td>The government can\u2019t print money or fund social programs during crises \u2014 hospitals, agriculture, and education suffer.<\/td><\/tr><tr><td><strong>Full autonomy from Parliament\/Government<\/strong><\/td><td>CBSL technocrats answer to&nbsp;<strong>IMF frameworks<\/strong>, not your elected MPs. There is&nbsp;<strong>no way to override<\/strong>&nbsp;their policies.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>What would have happened without resistance?<\/p>\n\n\n\n<p>Had the CBSL Act passed&nbsp;<strong>unchanged<\/strong>, Sri Lanka would have become:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A<strong>debt colony<\/strong>, where\u00a0<strong>foreign creditors and IMF officials dictate policy<\/strong>.<\/li>\n\n\n\n<li>A<strong>paralyzed democracy<\/strong>, where elected leaders are helpless during national emergencies.<\/li>\n\n\n\n<li>A<strong>technocratic dictatorship<\/strong>, where a handful of unelected officials determine nation\u2019s economic fate \u2014 without any accountability.<\/li>\n<\/ul>\n\n\n\n<p>The Heroes who fought back \u2014 and what they saved<\/p>\n\n\n\n<p>Thankfully,&nbsp;<strong>a group of patriotic petitioners<\/strong>&nbsp;filed a&nbsp;<strong>Fundamental Rights case<\/strong>&nbsp;at the Supreme Court:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Jehan Hameed<\/strong><\/li>\n\n\n\n<li><strong>Col. Anil Amarasekara<\/strong><\/li>\n\n\n\n<li><strong>MP Udaya Gammanpila<\/strong><\/li>\n\n\n\n<li><strong>B. Abeysekara Gunaratne<\/strong><br><a href=\"https:\/\/counterpoint.lk\/wp-content\/uploads\/2023\/03\/Central-Bank-Petition.pdf\">Read the petition (PDF)<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/counterpoint.lk\/wp-content\/uploads\/2023\/03\/Central-Bank-Petition.pdf\">Central-Bank-Petition.pdf<\/a><\/li>\n<\/ul>\n\n\n\n<p>The Supreme Court responded with vital changes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Required CBSL to enter a<strong>formal inflation-target agreement<\/strong>\u00a0with government.<\/li>\n\n\n\n<li>Mandated<strong>reporting to Parliament<\/strong>.<\/li>\n\n\n\n<li>Restored<strong>limited constitutional and legal oversight<\/strong>.<\/li>\n\n\n\n<li>Corrected<strong>procedural flaws<\/strong>\u00a0in how the bill was passed.<\/li>\n<\/ul>\n\n\n\n<p><strong>Without these petitioners<\/strong>, the CBSL would now be&nbsp;<strong>completely beyond the reach of Parliament<\/strong>&nbsp;and the People.<\/p>\n\n\n\n<p>However \u2014 the CBSL is not truly accountable to Sri Lanka<\/p>\n\n\n\n<p>Despite the Supreme Court\u2019s corrections, the&nbsp;<strong>IMF-style model remains mostly intact<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>CBSL\u2019s inflation targets and reports are<strong>symbolic<\/strong>, not binding.<\/li>\n\n\n\n<li>The government<strong>cannot override or direct CBSL<\/strong>\u00a0in times of crisis.<\/li>\n\n\n\n<li><strong>Foreign creditors come first<\/strong>\u2014 not the citizens of Sri Lanka.<\/li>\n<\/ul>\n\n\n\n<p>Unlike:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>India\u2019s RBI<\/strong>, which works with the Finance Ministry.<\/li>\n\n\n\n<li><strong>UK<\/strong>, where the Treasury can override Bank of England in emergencies.<\/li>\n\n\n\n<li><strong>USA<\/strong>, where the Federal Reserve is answerable to Congress.<\/li>\n<\/ul>\n\n\n\n<p><strong>Sri Lanka now has one of the world\u2019s most insulated central banks<\/strong>&nbsp;\u2014 thanks to a bill passed during an unelected presidency.<\/p>\n\n\n\n<p>Sri Lanka\u2019s Taxpayers have a right to demand questions from CBSL<\/p>\n\n\n\n<p>Who bears the cost?<\/p>\n\n\n\n<p>Sri Lanka\u2019s public sector salary and pension bill stands at around&nbsp;<strong>LKR 1.7 trillion per year<\/strong>&nbsp;\u2014 over half of the total government expenditure.<\/p>\n\n\n\n<p>Within this bloated spending:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Central Bank of Sri Lanka recently awarded salary increases averaging<strong>50\u201377%<\/strong>\u00a0for its staff<\/li>\n\n\n\n<li>An entry-level clerk (Office Assistant) now earns<strong>nearly LKR 200,000 per month<\/strong>, while a Deputy Governor may receive\u00a0<strong>LKR 1.7 million<\/strong>\u00a0in salary alone<\/li>\n\n\n\n<li>CBSL also contributes<strong>29%<\/strong>\u00a0of gross salary to pensions\/provident funds, plus foreign training and low-interest loans<\/li>\n<\/ul>\n\n\n\n<p>Taxpayers spend \u2013 IMF &amp; Pro-IMF staff benefits?<\/p>\n\n\n\n<p>CBSL staff are unaccountable to taxpayers. Instead they work to redirect public resources to creditors focusing on inflation control &amp; debt repayment. Using taxpayers money CBSL acts like a quasi-private institution, using public funds while prioritizing IMF\/creditor interests, not citizens.<\/p>\n\n\n\n<p>Key takeaways for taxpayers:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Every rupee<\/strong>spent on CBSL salaries, perks, and pensions now\u00a0<strong>funnels into a system prioritizing foreign lenders<\/strong>, not local communities.<\/li>\n\n\n\n<li>Tough economic reforms, cost-of-living increases, and service cuts are<strong>not matched by flexibility in monetary policy<\/strong>\u00a0because of the CBSL\u2019s new structure.\n<ol class=\"wp-block-list\">\n<li>The public has a right to ask: Should the<strong>CBSL continue to enjoy elite compensation<\/strong>\u00a0when it isn\u2019t serving national needs?<\/li>\n<\/ol>\n<\/li>\n\n\n\n<li>Why should Sri Lankans<strong>fund a bank that isn\u2019t accountable to them<\/strong>\u00a0or working in their interest?<\/li>\n<\/ol>\n\n\n\n<p>What Sri Lankans Must Demand:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A full<strong>review and reduction<\/strong>\u00a0of unsustainable CBSL salary and pension structures.<\/li>\n\n\n\n<li><strong>Parliamentary oversight<\/strong>of CBSL spending and compensation, ensuring public funds serve the public.<\/li>\n\n\n\n<li>Restoration of a Central Bank that is<strong>democratically accountable<\/strong>, transparent, and aligned with Sri Lanka\u2019s development priorities.<\/li>\n<\/ul>\n\n\n\n<p>Finding Fault is Not enough \u2014 Parliament Must Act<\/p>\n\n\n\n<p>Blaming Ranil Wickremesinghe now is&nbsp;<strong>not the solution.<\/strong><\/p>\n\n\n\n<p>He may have betrayed the nation by agreeing to this IMF condition, but today\u2019s&nbsp;<strong>Parliament holds the power to reverse this Act<\/strong>.<\/p>\n\n\n\n<p>Why must the CBSL Act be repealed or amended?<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It gives power to unelected officials who are not accountable to the People (this is a violation of Article 3).<\/li>\n\n\n\n<li>It shackles the government\u2019s hands during economic crises<\/li>\n\n\n\n<li>It implements policies that hurt local businesses, jobs, and welfare.<\/li>\n\n\n\n<li><strong>Taxpayers need not fund an institution that serves the IMF \u2014 not the people.<\/strong><\/li>\n<\/ul>\n\n\n\n<p>What must be done \u2014 before it\u2019s too late<\/p>\n\n\n\n<p>The current government&nbsp;<strong>has the majority<\/strong>&nbsp;in Parliament. It must act now.<\/p>\n\n\n\n<p>A NEW BILL that:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Restores<strong>parliamentary oversight<\/strong>\u00a0of CBSL<\/li>\n\n\n\n<li>Enables the<strong>government to direct monetary policy<\/strong>\u00a0during crises<\/li>\n\n\n\n<li>Ends<strong>IMF conditionalities embedded in domestic law<\/strong><\/li>\n\n\n\n<li>Puts<strong>Sri Lanka\u2019s development, not debt repayment<\/strong>, first<\/li>\n<\/ul>\n\n\n\n<p>Final Warning<\/p>\n\n\n\n<p><strong>If the Central Bank serves foreign creditors instead of the People, democracy becomes meaningless.<\/strong><\/p>\n\n\n\n<p>If your elected government cannot govern the economy,&nbsp;<strong>who governs you? Why should a private institution dictate to a sovereign nation &amp; its people?<\/strong><\/p>\n\n\n\n<p>Sri Lanka must choose:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A<strong>sovereign republic<\/strong>\u00a0led by its people,<br>or<\/li>\n\n\n\n<li>A<strong>debt colony<\/strong>, ruled by unelected technocrats.<\/li>\n<\/ul>\n\n\n\n<p>Let\u2019s finish what the petitioners began \u2013&nbsp;<strong>Reverse the CBSL Act 2023.<\/strong><\/p>\n\n\n\n<p><strong>Reclaim our future.<\/strong><\/p>\n\n\n\n<p><strong>Shenali D Waduge<\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Shenali D Waduge In 2023, as Sri Lanka was reeling from its worst economic crisis in decades, unelected President&nbsp;Ranil Wickremesinghe&nbsp;agreed to a $3 billion IMF bailout. But hidden inside the loan terms was a&nbsp;Trojan Horse&nbsp;\u2014 the demand to make the&nbsp;Central Bank of Sri Lanka independent\u201d&nbsp;from government and parliamentary oversight. What followed was the&nbsp;Central Bank of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"class_list":["post-150744","post","type-post","status-publish","format-standard","hentry","category-shenali-waduge"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/150744","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=150744"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/150744\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=150744"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=150744"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=150744"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}