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Cabraal says Central Bank will guide markets

ECONOMYEXT – Sri Lanka’s central bank will guide markets and deploy monetary tools mindful of repercussions, and guide markets in turbulent times, newly appointed Central Bank Governor Nivard Cabraal said last week.
“The policy measures must be taken,” Cabraal told a forum of senior central bankers and finance officials after taking office as Governor for the second time on September 15.
“There are no short cuts. Sometimes there are tough policy measures to be taken.
“When we take policy measures there are always repercussions from another side. Sometimes if you do not take those policy measures you meander along.”
“When a tool is used, and one area is getting cured, it can emerge as a problem in another area,”
“It is not easy to manage this balance. You have to be conscious of all the outcomes that generally arise when you take certain policy measures.”
Cabraal who was previously central bank chief from 2006 to 2014 said the central bank hoped to guide markets.
“We would need to lead the economy in these measures,” he said. “That means we have to be always one step ahead, two steps ahead sometimes three steps ahead.
“I think we would from now onwards take the lead in providing guidance to markets as well as the economy.
“We have got to take that step clearly and boldly so that the market would be able to read the signs that the central bank is making so that would need to use that guidance particularly in turbulent times like what we having now.
“This is not the time to abrogate that leadership role.”
Cabraal said he expected to seek the views of market participants and also staff.
He said some people wanted advice from outsiders like the International Monetary Fund but there was a lot of knowledge within the bank.
“Once course of action is decided, it has to be steadfastly followed, he said.
Sri Lanka’s gross forex reserves are now down to 3.5 billion US dollars and net reserves depleted after record money printing not seen in the history of the soft-pegged central bank.
Central banks that print large volumes of money and lose reserves become helpless and market participants also become helpless as the newly injected liquidity creates forex shortages, hit the exchange rate and drives up asset prices.
When rate normalization is delayed and net foreign assets turn negative, a central bank itself can rapidly accumulate quasi fiscal losses and lose its ability to carry out policy, analysts say.
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Navy divers retrieve 148 from watery graves within a year

The Diving and Salvage Unit of the Sri Lanka Navy often renders its assistance to search for persons who go missing in water bodies and recover the bodies of drowned persons. In the past year (from 22nd May 2022 to 22nd May 2023) the Sri Lanka Navy has recovered 148 corpses from watery graves.
Suicide attempts, misfortunes during fishing, bathing in water bodies under the influence of liquor, engaging in waterborne sports without swimming skill, bathing in unknown water bodies and stepping into crocodile-infested waters have been identified as some of the main reasons for the deaths.
Among the 148 corpses recovered by the Navy in the past year, there were 19 incidents of suicide, 18 cases of misfortune during fishing, and 111 incidents due to the carelessness of people.
By being cautious during daily tasks and fishing activities, it is possible to reduce the number of deaths caused by drowning in water bodies. Thus, the Sri Lanka Navy is urging the general public to be mindful and take necessary precautions in order to decrease the occurrence of drowning incidents.
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Establishment of the Truth and Reconciliation Commission

The Cabinet of Ministers approved the combined proposal presented by the Minister of Justice, Prison Affairs and Constitutional Reforms and the Minister of Foreign Affairs for the establishment of the Truth and Reconciliation Mechanism in Sri Lanka taking into account the work of the Truth and Reconciliation Commission in South Africa.
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Draft report on the inquiry into the destruction of North-Eastern archaeological sites and interference with conservation activities handed over to the Prime Minister

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