One should not forget in this context, the so-called discussion that CBSL governor and his colleagues had with President Gotabaya Rajapaksa (GR) soon after the present governor of the bank was appointed. The President was pointedly virtually dictating to the monetary authorities to assist in implementing “my”, i.e., GR’s economic policies. On that day, CBSL virtually lost its independence and literally became government’s bank. The pandemic provided a good opportunity to demonstrate its cooperation with GR and CBSL went to the printing machine and worked overtime to flood the market with currency. The inflationary effect of this exercise was casually ignored or deliberately minimized by subtracting food inflation from calculation. Expenditure on food consumes the largest percentage in the income of a vast majority of ordinary householders. The exclusion of this item in the calculation of inflation is to camouflage the truth. Moreover, investors know that the interest they earn on their bank deposits is lower than the prevailing inflation rate, and they will therefore park their savings beyond the reach of tax authorities. This means growth of a black economy. Didn’t CBSL itself encourage earlier owners of ill-gotten wealth lying abroad to be brought in without questions being asked?
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