Government to review Budget 2019 in June: CBSL governor

COLOMBO (News 1st): Central Bank Governor Dr Indrajit Coomaraswamy says the entire budget will be reviewed in June to see how best to manage within the current allocation. Speaking at the event "State of the economy as reflected in the Central Bank Annual Report 2018", Dr Coomaraswamy noted that if the country experiences a slow down in the economy, and if the country bounces back because the security situation is stabilized then the slow down in the economy could be contained. However, he continued to say that if the economy experiences a slow down that VAT receipts and corporate tax receipts would be adversely affected which would, in turn, affect the revenue of the country. The governor further said that due to the prevailing situation that the government is likely to incur defence expenditure which would affect the expenditure of the country. He added that although they hope to review the entire budget and see how best to manage within the current allocation that there could be some slippage. Speaking about SWAP agreements, the governor said that as a further reinsurance that the CBSL has arranged three SWAP agreements, one of US$ 400 million with the reserve bank of India, a billion dollar equivalent with the Central Bank in Qatar in Riyal and also a $ 1.7 billion agreement with the Peoples Bank of China in Yuan. He added that with $3.1 billion in SWAP agreements at the country's disposal that it would provide further re-assurance in terms of our capacity to meet obligations.