ECONOMYNEXT – Finance Minister Ravi Karunanayake called upon the Speaker of Parliament to initiate an inquiry on a leak involving reported attempts to appoint outsider as Deputy Governors of the central bank.
Karunanayake said Sri Lanka’s The Sunday Times newspaper had published a report about a discussion of the Monetary Board of the central bank.
The newspaper said Treasury Secretary, who is an ex-officio member of the Monetary Board had proposed the appointment of an outsider as Deputy Governor to the Central Bank instead of promoting an assistant governor as is the usual practice.
Karunanayake said he wanted the leak probed and in addition to the Members of the Monetary Board, and a Deputy Governor was present.
There has been rising concerns over recent events, perceived as undermining the independence of the Central Bank.
Sri Lanka’s central bank and the current administration is under a cloud over alleged insider dealing and rigged bond auctions involving Perpetual Treasuries, a firm connected to ex-Central Bank Governor Arjuna Mahendran.
The Parliament’s Committee on Public Enterprises has already called for legal action over the deals.
There have also been several leaks of documents relating to irregularities from 2015 onwards.
It has been the practice to appoint an economist or bureaucrat, who is familiar with monetary and fiscal affairs – usually a central banker – as the Governor of the Central Bank.
Ex-President Chandrika Kumaratunga appointed a respected businessman, breaking with tradition, which later opened the floodgates to the politicization of the Central Bank.
However President Maithripala appointed Indrajit Coomaraswamy, a former central banker who had also worked in the Treasury before going abroad, as Central Bank Governor, bringing renewed hope that the institution will regain its former standing.
Coomaraswamy is the first economist to be appointed since A S Jayewardene left in June 2004.
Prime Minister Ranil Wickremesinghe had also appointed Chrishantha Perera and Nihal Fonseka, to the monetary board, who are also highly regarded.