Guessing game continues as govt. undecided over new CB Governor

The drama that has been unfolding for the las t f ew weeks over the appointment of a governor to the country’s Central Bank still remains in suspense as Sri Lankan policymakers opting not to make any announcement regarding the matter yesterday, despite the incumbent governor’s term ending today. Regar d less of Pres iden t Maithripala Sirisena’s statement during the morning hours of yesterday over the appointment of a new governor “within hours”, the day ended quite uneventfully, leaving room for much speculation.

Early hours of the day saw former Central Bank Deputy Governor W.A. Wijewardena’s name trending in the social media as a possible candidate—to the extent that a letter had already been prepared appointing him as the new governor and it was a matter of time it being delivered to him. However, following President Sirisena and Prime Minister Ranil Wickremesinghe’s visit to the Central Bank premises in the late afternoon, the speculations took a different course with Deputy Governor Dr. Nandalal Weerasinghe’s name surfacing as the newest candidate for the job. Dr. Weerasinghe is the senior most Deputy Governor at the Central Bank. In addition to Dr. Weerasinghe’s name, the names of Institute of Policy Studies (IPS) Executive Director Dr. Saman Kelegama and US-based Professor Lalith Samarakoon had also been reportedly suggested for the post, Mirror Business learns.

Meanwhile, the speculations took a new twist with Finance State Minister Lakshman Yapa Abeywardene reportedly stating to media that a governor will be appointed only for a period of one year. According to Sri Lanka’s monetary law, a Central Bank Governor is appointed for six years. Civil society organisations and good governance activists have vehemently opposed the reappointment of the incumbent Governor Mahendran to the prestigious post, amid allegations of rigging the country’s bond market in favour of a bond dealership owned by his son-in-law, which he has strongly denied.

A leading economic analyst who preferred anonymity praised the civil society organisations and good governance activists for successfully influencing the government’s decision-making process and stressed such pressure should be maintained until integrity returns to the Central Bank. He also urged the government to adhere to the country’s monetary law in appointing a new governor, without trying to bend the rules as such actions could set up bad precedents and lead to negative unintended consequences. “Uncertainty at the policy-making level is the biggest threat to business and investor sentiment,” he stressed. It was only Tuesday US Ambassador to Sri Lanka Atul Keshap called for clear and consistent policies in all areas of the economy to win investment dollars. He said such policies were the cornerstone for creating an attractive environment for investors, both foreign and domestic.