Tight monetary policies to keep economy trim
Anjana Samarasinghe
MONETARY POLICIES: The Central Bank of Sri Lanka (CBSL) is to
maintain 11.6% of reserve money growth for 2007 while maintaining 14.8%
broad money growth for the end of this year through vibrant monetary
policies.
Deputy Director CBSL (Economic Research Department) Swarna Gunaratne
told the media at a press conference held yesterday at the Ministry of
Finance that in the first quarter of this year the country was able to
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Minister of State Revenue and Finance Ranjith Siyambalapitiya and
Deputy Director CBSL Swarna Gunaratne at the press conference.
Picture by Sumanachandra Ariyawansa
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contain reserve money growth at 16.5%.
During the first quarter CBSL estimated to inject Rs 15 billion into
the economy but country was able to control this amount to Rs 12 billion
she added.
Gunaratne said CBSL had to inject Rs 42 billion into the economy last
year though they had targeted Rs 30 billion.
CBSL estimated Rs 30 billion based on are expected 6% GDP growth and
9% GDP deflation last year. But country gained 7.4% GDP growth and 10.3%
GDP deflation last year. Due to this CB has to inject an additional Rs
12 billion into the economy.
CB also expects to maintain 9% to 10% inflation by the middle of this
year through vibrant monetary policies. In 2004 Sri Lanka had a high
reserve money growth and CB absorbed additional money through Treasury
Bills. Since 2004 CB adopted vibrant monetary policies to maintain a
healthy economic environment, she said.
Minister of State Revenue and Finance Ranjith Siyambalapitiya said
that the Central Bank was also able to regain Rs. 3.5 million worth of
coins which was collected in tills in the Kegalle district and they
expect to organise the same programme in Hambantota to collect coins
still, in the tills to mitigate the coin scarcity in the economy.
CB needs to spend over Rs. 400 million to mint coins and the
collecting coins programme could save a large amount of money that is
needed to mint coins, he said. |
