Confidence holds the fabric of the entire economy and many people have forgotten on this particular point, Central Bank of Sri Lanka Governor, Ajith Nivard Cabraal said.
“An economy works on confidence and if the confidence is not there it will affect to the investors, which would then lead to detrimental on all economic activities. Therefore, the glue of confidence that binds the entire economy together is necessary in delivering the results we expect,” he noted.
He made these remarks at the Conference for Lecturers of Universities of Sri Lanka organized by the Central Bank held on 29 and 30 June at the John Exter International Conference Hall – Central Bank, Colombo. The conference will discuss on the policies measures taken by the Central Bank and how it has impacted on the economy. It will also be a platform for the academia to have a closer dialogue with the Central bank as well. This is the second consecutive year of this conference.
“Sri Lanka is strongly marching towards a higher economic growth. On the way forward there are certain factors and measures that need to be deal with and for that, retardation is essential to stay stable. Key challenges such as maintaining the inflation rate at a lower level and maintaining financial stability are tough calls for any economy,” Cabraal said.
The country had been recording an average inflation rate of around 12% from 1977 to 2005. However, now we have been able to maintain single digit inflation rate. Around 400 banks in the US failed even though there was a greater deal of regulation in their financial system; not a single bank in Sri Lanka collapsed. So we can speak of dimensions where we maintained stability and better management skills, he explained.
Governor said, “With this highly volatile world economic scenario it is vital to be on top of the curve 24/7. The corporate sector needs to be nimble foot and react quickly, while the government sector stays afloat. People have to take real time basis decisions in hindsight. Hence, it is important for us to analyze these decisions with a rational view, which will lead for a sustainable economy.”
“It is significant that we receive in-depth knowledge from academia in managing the economy that is stimulated with new ideas and happenings from the world. Therefore, we find the academia as ambassadors that provides their insights in managing the economy and to maintain a closer dialogue,” Cabraal said.