By Sri Lanka’s new Central Bank Act is a challenge for the government because it restricts money printing, which the government has been using to finance its spending. The Act also requires the government to reduce its spending in line with its revenue, which is limited by a narrow tax net.
The government has pledged to raise taxes and rationalize spending in order to meet the requirements of the new Act. However, this will be a difficult task, especially given the country’s current economic crisis.
It is realistic that the new Act will pose a challenge for the government, but it is also essential for the country’s long-term economic health. By reducing money printing and government spending, the Act will help to bring inflation under control and stabilize the economy.
However, it is important to note that the government will need to implement the new Act carefully and gradually in order to avoid any negative economic consequences. The government should also focus on addressing the underlying causes of the country’s economic problems, such as its narrow tax net and inefficient public sector.
Overall, the new Central Bank Act is a positive step for Sri Lanka, but it will require careful and decisive implementation from the government.
Meanwhile, Dr. Ranee Jayamaha has announced her resignation from the Monetary Board and will not be a member of the new Governing Board of the Central Bank of Sri Lanka (CBSL).
The new board is expected to be constituted by President and Minister of Finance Ranil Wickremesinghe in the coming days under the new Central Bank Act.
