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Sri Lanka president meets central bank on forex reserves, confidence building

ECONOMYNEXT – Sri Lanka’ President Gotabaya Rajapaksa has met central bank Governor W D Ashman and other officials on forex reserves and confidence building among investors, his office said.

“The President also enquired into the issues connected with the management of Foreign Exchange Budget and external reserves,” his office said in a statement.

“He urged the CBSL officials to maximum confidence building measures are taken for the investors in the Sri Lanka Sovereign Bonds.”

Sri Lanka bond prices fell sharply (interest rates went up) in March 2020 as rate cuts and liquidity injections pressured the rupee raising fears about the ability of the country to repay dollar liabilities.

The central bank had injected about 24 billion rupees in the last week of February 2020 through a profit transfer, another 50 billion on March 13 and more than 50 billion rupees through a reserve ratio cut on March 17.

The full statement is reproduced below.

President discusses economic impact of COVID-19 pandemic with Central Bank officials

President GotabayaRajapaksa held a discussion with the Governor of Central Bank of Sri Lanka (CBSL) and other senior officials to assess the emerging macro-economic conditions due to the impact of COVID-19 pandemic. The steps taken by the CBSL to manage the operations of the Bank to provide liquidity and access to finance were also discussed during this meeting.

The President also enquired into the issues connected with the management of Foreign Exchange Budget and external reserves. He urged the CBSL officials to maximum confidence building measures are taken for the investors in the Sri Lanka Sovereign Bonds.

President Rajapaksa instructed that the CBSL should ensure that all the banks are kept open. The Bank officials were also instructed to workout post-COVID- 19 economic strategies.

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Secretary to the Treasury, the CBSL Governor and its three Deputy Governors, Assistant Governor in charge of Bank Supervision and Director of Information Technology participated at the discussion.