Question mark over Monetary Board’s role

By Shamindra Ferdinando

Former Governor of Uva, Southern and Central Provinces Rajith Keerthi Tennakoon yesterday (22) asked what the role of the Monetary Board would be in case the National Economic Council (NEC) headed by President Gotabaya Rajapaksa accepted the set of proposals made by an Advisory Committee especially appointed to strengthen government efforts to overcome the deepening financial crisis.

 The Monetary Board comprises Governor of the Central Bank Ajith Nivard Cabraal (ex-officio), Treasury Secretary S. R. Attygalle (ex-officio), Sanjeewa Jayawardena, PC, Dr. Mrs. Ranee Jayamaha and Samantha Kumarasinghe.

Jayamaha, an ex-Deputy Governor of CBSL, and Multichemi International Ltd., Chairman Kumarasinghe joined the Monetary Board in late June 2020 whereas Jayawardena received his appointment in Feb 2020.

 Tennakoon told The Island that the President’s Media Division (PMD) hadn’t referred to the five-member Monetary Board at all when issuing statements in Sinhala and English that dealt with five proposals meant to address the issues at hand.

 The Advisory Committee handed over its proposals to President Rajapaksa on Monday (22).

 The civil society activist who recently received appointment as Executive Director, Sri Lanka Human Rights Centre asked whether the proposals had been made without taking into consideration the functions of the Monetary Board. Ad-hoc mechanisms couldn’t be expected to perform the stipulated functions of the Monetary Board, the CBSL and the Treasury, Tennakoon said.

 The NEC comprises President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa, Ministers Dr. Bandula Gunawardane, Basil Rajapaksa, Johnston Fernando, Mahindananda Aluthgamage, Dr. Ramesh Pathirana, Governor of the Central Bank Ajith Nivard Cabraal, Secretary to the President Gamini Senarath, Secretary to the Treasury S.R. Attygalle, and Deputy Governor of the Central Bank Dhammika Nanayakkara.

 The Advisory Committee comprised H.D. Karunaratne, Prof. Shirantha Heenkenda, Dhammika Perera, Krishan Balendran, Ashroff Omar, Dushni Weerakoon, Dr. Hans Wijesuriya, Vish Govindasamy, S. Renganathan, Ranjit Page, Suresh de Mel, Duminda Hulangamuwa, Sujeewa Mudalige and Prabash Subasinghe.

 Tennakoon urged political parties represented in Parliament and those genuinely interested in public wellbeing to take up these issues. The civil society activist said that though two members of the Monetary Board namely Cabraal and Attygalle had been accommodated in the NEC, the apex apparatus had been neglected.

 Responding to another query, Tennakoon pointed out that the declaration made by the Chinese Ambassador in Colombo Qi Zhenhong about Sri Lanka making fresh request for USD 1 bn financing facility and USD 1.5 bn buyer’s credit proved again the failure on the part of the government to take the public into confidence. Tennakoon said that according to Ambassador Qi Zhenhong statement in addition to the USD 2.5 bn the government had asked from China, since March 2020 China provided funding amounting to USD 2.8 bn.

 Tennakoon said that the Advisory Committee’s proposals for the appointment of a joint Technical Team comprising CBSL and Treasury officials to propose international assistance, appointment of financial and legal advisors, the Technical Team to come out with set of proposals, expert team to advise the Finance Minister and confidence building measures to address supply related issues should be examined taking into consideration perceived shortcomings in existing mechanisms.

 Commenting on the forex crisis, Tennakoon said that the NEC and Advisory Committee couldn’t be unaware of how an inordinate delay on the part of the Finance Ministry and the CBSL in taking remedial measures caused the current catastrophe. Who would take the responsibility for delaying the decision on the IMF’s intervention for so long? Tennakoon asked, pointing out that one-time Deputy Governor of the CBSL Dr. W.A. Wijewardena recently declared the current dispensation should have sought the IMF’s intervention in April 2021, during Prof. W. D. Lakshman’s tenure as the Governor.

 Tennakoon alleged that the government hadn’t correctly assessed the situation though the national economy was in a precarious stage. The Advisory Committee’s initial proposals failed to address the CBSL and the Finance Ministry not taking a common stand on the issue at hand, Tennakoon said. The two institutions right throughout the crisis pulled in different directions, thereby should be held responsible for the present pathetic state of affairs, he said.