Central Bank’s ability to print money limited under new Act

The Central Bank of Sri Lanka’s (CBSL) ability to print money will be limited with the new Central Bank Act which came into effect from yesterday (September 15).

This move came as opposed to their manners of printing money, rather excessively, in the recent past, the Acting Minister of Finance Ranjith Siyambalapitiya said.

The Central Bank of Sri Lanka Bill was passed in Parliament with amendments in July and it came into effect yesterday as an Act aimed at bolstering the bank’s independence, accountability and price stability in the country.

According to the Act, the Central Bank will be able to print money during special circumstances such as when dealing with a national security or health emergency.

Meanwhile, with the enforcement of the Act, the Treasury will not be able to be involved in the process to appoint a Governor of the Central Bank.

The Act contains a set of qualifications that are required for an individual to function as the Governor of the Central Bank.

The appointment of the Governor also requires the approval of the Constitutional Council.