The Central Bank will ensure the stability of the banking system and the protection of public deposits in any kind of domestic debt optimization, Central Bank Governor Dr Nandalal Weerasinghe said.
The governor, while quashing rumors, assured that the public deposits would be unharmed regardless of any domestic debt restructuring to be conducted as per the agreement with the IMF for the extended fund facility of 2.9 billion US dollars.
He made these remarks recently during a public lecture on “State of the Economy: Challenges and Outlook as Reflected in the Central Bank Annual Report 2022” held in Colombo.
Dr Weerasinghe insisted that one of the key objectives of the central bank is to maintain banking system stability.
“I just want to make that statement. And also, I think if you can see yesterday, the Sri Lanka Bankers Association also confirmed on the basis of assurances we have given.”
Dr.Nandalal Weerasinghe further hopes that interest rates will normalize in the second half of the year, in line with the inflation expectations prediction, which is a single digit towards the end of the fourth quarter.
“I think what is most important is the inflation, which is coming down faster than we expected. With that, we also see interest rates from the peak easing down, especially after we announced the complete debt restructuring process. We think especially the market interest rates will come down faster, so we are hoping that in the second half, interest rates will normalize in line with the inflation expectations prediction, which is a single digit towards the end of the fourth quarter this year,” he said.
