The Central Bank of Sri Lanka, on Friday (04), in its latest Monetary policy Review, advised the government to consider increasing fuel prices and electricity tariffs immediately to reflect the cost to overcome the present economic challenges

The Central Bank also urged the government to introduce measures to discourage non-essential and non-urgent imports based on the previous recommendation made by the Central Bank; incestivise foreign remittances and investments further, implement energy conservation measures, while accelerating the move towards renewable energy; increase government revenue through suitable tax increases on a sustained basis; mobilise foreign financing and non-debt forex inflows on an urgent basis; monetise non-strategic and underutilised assets and postpone non-essential and non-urgent capital projects.

The Central Bank said that the above measures would lay the foundations for a coordinated approach to overcome the challenging economic circumstances faced by the country and to prudently exit the COVID-related policy accommodations taken by the government in the last two years.

The Central Bank added that it would continue to closely monitor the emerging macroeconomic and financial market developments, both globally and domestically, and would stand ready to take further measures as appropriate. The aim of the Bank is to stabilise inflation, the external sector and the financial sector.

The Central Bank added that the recovery in the global economic activity is expected to weaken due to the spread of the Omicron COVID-19 variant, supply chain disruptions and geopolitical tensions in Eastern Europe. The bank added that Global inflation is expected to remain high and persistent due to elevated energy prices and continuing supply chain disruptions, prompting stronger monetary policy responses by central banks globally.