In a short interview with the Bloomberg Sri Lanka’s Central Bank Governor Dr Nandala Weerasinghe said the following:
- Inflation to peek in September but according to latest CBSL projections it won’t be touching 70% even after considering electricity price hike
- Monetary expansion is slowing down
- Prices are settling down
- Exchange rate is stabilising
- No shortages
- No further interest rate hike needed at the moment
- Higher contraction on the demand side than expected
- Will only restructure external debt
- Can manage without restructuring domestic debt
- Expects IMF to start disbursing Extended Fund Facility funds by December
- Banks are in a very good position but going forward if Non- Performing Loans keep rising, in a position to handle situation along with the banking sector
- Government budget next month
- November budget (2023 budget) will make strong policy changes
- Even without external financing can manage essential imports with increase in exports and curtailment of imports
- More foreign exchange coming through the banking sector, CBSL gradually increasing reserve position
Overall the situation is much better than expected
