Meeting with President was only portrayed as a crisis – CBSL Governor

COLOMBO (News1st): Central Bank Governor Prof. W D Lakshman clarified today that the Central Bank's decision to increase the funding threshold of the Saubagya Covid - 19 Renaissance Facility from Rs. 50 Billion to Rs. 150 Billion was reached prior to meeting with President Rajapaksa. ''What exactly happened was portrayed as a crisis. The media claimed that the Central Bank reached the decision after meeting the President. However, this decision was reached after three rounds of discussions with the Monetary Board, prior to the meeting with President Rajapaksa'' the Governor said during a media briefing today. (09 July) Prof. Lakshman added that in a bid to prevent such incidents from taking place in the future, a new system has been introduced where the Governor would first brief the President and Prime Minister prior to the holding of such discussions. The Central Bank said, non-performing loans have risen to 5.6 percent, from 5.1 percent during the first three months of 2020. The central bank has purchased treasury bills worth Rs.232 Bn during this year. However, despite high levels of surplus liquidity available to banks, credit extended to the private sector contracted significantly in May 2020 to 6.4 percent, while net credit to the government and public sector increased to 32.1 percent and 31.1 percent respectively. ''Inflation is very well anchored. Below our target range. But if we see any adverse reaction, we have lots of instruments to absorb that liquidity at any time '' said Senior Deputy Governor, Dr. P. Nandalal Weerasinghe.''