Recovery of US economy, growing Indian markets good for SL: CB Deputy Governor

Dr. Nandalal Weerasinghe speaking at the Chamber meeting, while CCC Chairman Samantha Ranatunga looks on

The recovery of the US economy and India’s growth prospects are bright spots for the Sri Lankan economy, which is expected to grow above 5.5% during the year 2015, says Central Bank of Sri Lanka Deputy Governor Dr. Nandalal Weerasinghe.

He also said the UK economy, which buys a major chunk of the Lankan apparel products is faring well and that will also augur well for the local economy.

However, Dr. Weerasinghe cautioned that the European economy’s slow growth could have an impact on the local economy, unless Sri Lanka gets the GSP+ and the ban on fisheries exports to the EU region lifted.

Dr. Weerasinghe made these comments last Thursday (29 October), when he spoke at the monthly ‘Main Committee’ meeting of the Ceylon Chamber of Commerce. Main Committee meeting of the Chamber attracts nearly 30 top corporate executives of the country, who are also members of the said committee. 

The top Central Banker also said the Chinese economy which is slowing down and the Japanese economy, which shows some rigidity, will have marginal impacts on Sri Lanka.

“Japanese Yen depreciation will impact Sri Lanka, as we import more vehicles from Japan and the Chinese economy’s slowdown will have an indirect impact on Sri Lanka,” added Weerasinghe.

Monetary policy

 Further speaking at the Ceylon Chamber meeting which was chaired by CCC Chairman Samantha Ranatunga, the Deputy Governor said Sri Lanka has been successfully maintaining the inflation and the interest rates at a single digit in the recent years, effectively managing the ‘monetary policy’.

 “We have controlled the twin aspects effectively. If the Central Bank can continue to implement monetary policy independently, we can maintain the inflation and the interest rate at the single digit,” the Deputy Governor, who is also the Chairman of the Monetary Policy Committee said.

Credit growth is monitored closely

 According to him, the Central Bank is closely monitoring the level of credit growth. Credit growth to the private and the public sector has increased during the month of August.

“We are closely monitoring the credit growth, if the growth is high, we will have to tighten up the monetary policy, we don’t want the monetary expansion in terms of growth in broad money (M2b) to go beyond envisaged levels,” further added Dr. Weerasinghe.

The Ceylon Chamber of Commerce invited Dr. Weerasinghe as a part of its procedure to invite a guest speaker to address its ‘Main Committee’ which meets once in a month at the Chamber’s Board Room. Ceylon Chamber of Commerce CEO/Secretary General Mangala P.B. Yapa was also present at the meeting, along with senior chamber officials.