Opposition United National Party (UNP) Leader Ranil Wickremesinghe yesterday blamed the Central Bank for the loss of US$6.6 million, which was invested in Greek Bonds and said Parliament could not ignore these questionable deals just because the total investment was remunerative as claimed by the Central Bank.
“What the Central Bank keeps saying is that since the investments made in other countries were remunerative, this loss is a minor matter. Anybody can understand it to be an unfair statement. Each investment must be taken up separately and checked by parliament whether remunerative or not. Parliament cannot ignore the detrimental investments just because the total investment was remunerative,” Mr. Wickremesinghe told Parliament.
“The main objective of investing in overseas bonds is to earn a larger income. Therefore, it’s customary to penetrate very scientifically into the future goals prior to engaging in such investments. They are initiated only after in-depth inquiry in market conditions. There is no indication that such an inquiry has been made before investing in Greek Bonds,” he said.
“According to what has been pointed out by economic analysts, the whole world began to see the degeneration of the economy in Greece in 2009. The most serious economic collapse that came about after re-establishment of democracy in Greece in 1974 came to surface towards the end of 2009 owing to world economic crisis and unlimited government expenses.
“A clear trend of degeneration in Bonds appeared by April 2010. With a view to saving the economy that was falling down, International Monetary Fund (IMF) and European countries offered a sum of 110 billion euros in May 2010. The situation deteriorated by the end of year 2011. It had to receive further loans in 2012. Not only that, yet another example indicating this degeneration is the figures of Gross Domestic Product in Greece.
The figure of GNP in 2010 was minus 3.5 which became a minus 6.9 in 2011. Situation being such nobody would purchase Greek Securities or Bonds. In fact, many who foresaw this situation sold their Bonds. But, the Central Bank of Sri Lanka did the right opposite that is to purchase Bonds.
“Not only that, certain facts as to whether approval of the CB Monetary Board has been obtained on this investment have been exposed through media. The Auditor General has said this investment is problematic. Equally, the mass media had reported that this matter has been carried out by ignoring even the guidelines issued by the Auditor General not to invest in these Bonds,” he noted.
In response Senior Minister Sarath Maunugama admitted that the Government had lost US$6.6 million by investing in Greek Bonds. He said these losses were incurred in two instances when the Central Bank had sold the bonds.
He said the Central Bank had sold a part of the Greek Bonds for the face value of Five million Euros at a loss of US$1.1 million in July last year. This precaution was taken as Euro Zone took a turn for the worse few weeks after this investment was made. This measure was taken to mitigate the risk of Greek investment,” he said.
The Minister said the Central Bank decided to dispose a further 10 million euros at face value at a loss of US $ 5.5 million in November last year.
The senior minister said Sri Lankan had however earned US$430 million from foreign investments last year.
He said the investments made on Greek Bonds were purchased in keeping with foreign exchange reserve management guidelines approved by the Monetary Board. (By Yohan Perera)
Calistus Jayatilleke Wednesday, 18 July 2012 05:08 AM
Looks like it is "Greek" to both the Central Bank Governor and the Senior Minister. Are we going to learn a new lesson in Economics of how to cover losses in one area with income from another area. It is Greek, indeed.
mohan Wednesday, 18 July 2012 05:09 AM
Greek did not had good crediting rating last year ,is it purchased on market or from some else ?
Imran Hussein Wednesday, 18 July 2012 06:09 AM
Last year? Last year is the worst for them Last five years so they been badly struggling. No one dealt with them. But we did for what? Isnt it fishy? Cabral must be sacked immediately.
Just Another Citizen Wednesday, 18 July 2012 06:06 AM
Is anyone going to resign over this? Or does that only happen elsewhere?
Gayal Wednesday, 18 July 2012 07:23 AM
There is nothing greek here. Loses are forseen when profits are made. 6.6 lost compared to 430 profit is a significant performance by CBSL.
John Wednesday, 18 July 2012 07:20 AM
The 'dynamic duo' Cabraal/Jayasundera will no doubt continue spinning..... now with a Minister in the web too, all in Greek!
peeda mossa Wednesday, 18 July 2012 10:13 AM
When was the last time someone was sacked for messing up his/her duties, in this (all-sins forgiven- if-you-are-on-my-side) country , Imran ?
sena Wednesday, 18 July 2012 10:27 AM
No sir each and every investment is a separate decision. And done on different dates/times. Any attempt to lump things together is nonsense Its meaningful to understand the following
What was the dates on which such investments in Greek Bonds were made and how much. at each occasion
How much of it has already been sold?
And the most important question is there any more bonds still in the books without being sold?
Frankly a central bank Should have dedicated Investing staff - And I am sure there are dedicated staff and there is a paper trail.
The auditor General could help instead of these matters being discussed in a comical manner
Kiris Baba Amaray Wednesday, 18 July 2012 05:40 PM
Yes putha, RW was silent all these days, knowing the full story - now he is opening the subject at the wrong time, mean when there is an Election fever.
Godagampala Rohana Wednesday, 18 July 2012 05:43 PM
"Greek" is tripical format of UNP under the leadership of Ranil. Correct.
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