Harsha corrects Central Bank on “nauseatingly one-sided propaganda attempt” remark
Monday, 13 January 2014 00:00
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UNP MP and its spokesman on the economy Dr. Harsha de Silva issued a statement through which he corrects Central Bank Governor Nivard Cabraal over a specific remark at the launch of 2014 Road Map recently.
Following is the full text of Dr. de Silva’s statement:
It has been brought to my attention that the Governor of the Central Bank has been repeatedly attacking my comment ‘nauseatingly one-sided propaganda attempt’ where I criticised one of his Monetary Policy Roadmaps. He apparently is using the said comment to convince audiences that my comment was unfair and that his assessments of the economy are always fair and balanced. I leave it to the intelligent reader to decide upon reading my reply.
First of all it is most unfortunate that the Governor, or whoever made the presentation that he delivered, changed the date of my comment from 4 January 2012 to 2 January 2013 (comment quoted with fabricated date in page 3 of the 2014 Roadmap) because that changes the entire context of my comment. Furthermore, such doctoring only worsen the already damaged credibility of data put out by various government institutions.
My argument was that the Roadmap avoided highlighting the impending balance of payments crisis Sri Lanka was facing as at January 2012 but instead painted a rosy picture that all was well. What I said became true within just weeks with the crash that sent the currency reeling and interest rates rising sharply. But, by changing the date from 2012 to 2013 it is possible to fool any audience.
The Daily Financial Times of 4 January 2012 reported my comments as “The Road Map of Monetary and Financial Sector Policy for 2012 unveiled yesterday is nothing but a nauseating propaganda attempt.” It went on to quote me as “The language is not only politically coloured but does not address the major external sector challenges the country is facing. The 140 slide marketing presentation has just two mentions of the trade deficit and one repeated set of bullets saying that it is not an issue as worker remittances, tourism and FDI will offset the same.”
My sharp criticism was that the Roadmap completely ignored the imminent depreciation of the currency, where I was quoted as “It has no analyses of the possible scenarios for exchange rates and interest rates given the current rupee defence strategy, but says it has more than sufficient reserves to intervene in the foreign exchange market, presumably to hold the currency at the current level. There is no mention of the appreciating real exchange rate but an unbelievable declaration that the exchange rate remained competitive giving the lie to what the President mentioned during his budget speech as justification for the devaluation.”
The graph illustrates the severity of the crash that began on 12 February 2012. Those who engage with regular households in this country would vouch for the hardships they had to encounter due to the policy blunder which I criticized at the time. I rest my case.
