COLOMBO – Sri Lanka’s central bank has earned profits of Rs 63.4 billion in 2020, in cash and depreciation gains after providing for Rs 6.8 billion in staff benefits, annual accounts showed.
The central bank earned Rs 56 billion on its foreign reserves, down from Rs 76 billion, as foreign reserves fell amid liquidity injections and rate cuts.
Currency depreciation brought in only Rs 7.1 billion as the US dollar peg was strengthened in the last few days of the year through various measures with the rupee falling from around 182 to 186 to the US dollar.
The central bank made a record Rs 137 billion profit in 2018 as Real Effective Exchange Rate (REER) targeting and stimulus in the form of ‘output gap’ targeting pushed the rupee down to 182 from 153 to the US dollar.
When central banks were private severe depreciation had brought public criticism, parliamentary inquiries, and sometimes guillotining and other punishments of senior officials.
However, in recent years, Governors and Deputy Governors of the Central bank of Turkey, which is notorious for currency depreciation and volatile rates, had been sacked.
The public also stormed the central bank of Lebanon as knowledge over who is responsible for monetary debasement grew.
Interest income from local currency assets went up to Rs 25.3 billion from Rs 18 billion as the agency bought Treasury bills (at relatively low rates compared to the past) and sterilization costs rose to Rs 8.3 billion from Rs 3.7 billion.
Staff costs fell to Rs 6.8 billion rupees from Rs 7.7 billion as pension benefits fell from Rs 2.2 billion to Rs 15 billion rupees.
-economynext.com