Cabraal quits as CBSL Governor; Wijewardena recalls the good, bad and ugly

Ajith Nivard Cabraal

Ajith Nivard Cabraal yesterday tendered his resignation as the Governor of the Central Bank to President Gotabaya Rajapaksa. 

Cabraal announced his resignation via a tweet stating: “In the context of all Cabinet Ministers resigning, I have today submitted my resignation as Governor to President Gotabaya Rajapaksa.”

Cabraal was the 16th governor of CBSL appointed in September 2021 whilst he created history as the first to enjoy Cabinet rank. 

Prior to the appointment, he was the State Minister of Money and Capital Market and State Enterprise Reforms from 12 August 2020. He was the Senior Advisor to the Prime Minister on Economic Affairs from November 2019 to August 2020. Cabraal was also the 12th Governor of the Central Bank of Sri Lanka from July 2006 to January 2015.

In a related development, Daily FT’s popular columnist and former CBSL Deputy Governor W.A. Wijewardena following Cabraal’s resignation said he had hope for CB and the monetary sector because Cabraal was better than his predecessor Prof. W.D. Lakshman. 

“Many blamed me for doing so; my explanation was that like King Mahasen, he had done both merits and demerits and we should now give him an opportunity; I in an interview with advocatalk

even gave him four pieces of advice. That advice was: 1) Remove Lakshman shock of holding the rupee at 203/$ and getting importers to put 100% margin 2) He should realise he is Governor of the nation’s CB and not Rajapaksa and serve our interest 3) Ask Gota to go back to tax system prior to 2019 and 4) Seek IMF funding,” Wijewardena recalled. 

“Sadly, he failed to listen to this advice and instead pronounced that he will go for a ‘homegrown solution’ claiming that CB has more experts than outside bodies.

I said that this map was a non-event because ANC had touched on areas for which he has no authority. Also, it was reviewed in December 2021 to find none of the goals have been achieved. There was still no positive response from ANC and he stubbornly held to his view of not allowing the rupee to depreciate and MF support; finally, when all reserves were gone, he had to allow LKR to fall freely causing problems for his political masters and SL, how nice had he been listening to us?” queried Wijewardena via his tweet. (https://twitter.com/waw1949/status/1510900515290648576?t=WSL_DG5k9rI_GDNW9cSrgw&s=08)