Friday Nov 15, 2024
Friday Nov 15, 2024
Wednesday, 8 September 2021 00:28 - - {{hitsCtrl.values.hits}}
The Central Bank’s move to fix the dollar to a permissible range yesterday was described as “regressive” by economists who maintained that it will only make the critical bailout by the International Monetary Fund (IMF) more challenging or even remote.
They also said that the action by the monetary authority though referred to as “moral suasion” to do good or the right thing, in this case given Sri Lanka’s situation it must be described as “immoral suasion”. It was pointed out that the Central Bank does not have enough dollars to sustain the latest move. “Importers though relieved with a low rate, will have to wait painfully longer for dollars to meet their requirements,” they added.
With most economists and global investment banks suggesting that an IMF bailout is the only way out for Sri Lanka from the foreign reserve crisis, they opined that with the latest move, the Central Bank has made that option more challenging or even closed the door.
“If by late realisation the Government decides to opt for IMF support eventually, the corrective actions and currency reforms required will be more painful and the Dollar rate would be far higher than the black market rate,” they pointed out.
