COLOMBO – Former State Minister of Money and Capital Markets Nivard Cabraal was on Monday (13) appointed Governor of Sri Lanka’s Central Bank by President Gotabaya Rajapaksa with effect from September 15, a post he had held until 2014.
“I will be concentrating on stability first and growth,” Cabraal said upon accepting the new appointment.
Cabraal, who resigned his parliamentary seat earlier in the day, takes over the Central Bank as the country faces severe monetary instability from large liquidity injections made to keep rates down and fill a budget deficit after tax cuts and a coronavirus pandemic.
Sri Lanka is facing forex shortages as the newly injected liquidity spills over the balance of payments triggering imports and undermining the credibility of the peg, leading to dollar hoarding and increasing materials hoarding.
There is no spot market and the forward cover is banned.
Incumbent Governor W. D. Lakshman is to retire from Tuesday (14).