The Central Bank has vowed to continue to help improve the country’s tax system and liberalise its monetary policies, despite economic and political challenges.
Central Bank of Sri Lanka (CBSL) Governor Arjuna Mahendran told The Straits Times last week that he has his work cut out for him, particularly as he took up the position only in January. “International currency volatility is very damaging to a lot of emerging economies and commodity exporters like Sri Lanka. Managing that impact is going to be a challenge,” Mahendran said.
“Domestically, revenue is the key thing that we need to fix. A lot of work has to be done, to reorient the way taxes are collected in Sri Lanka,simplifying them, making it easier for taxpayers to pay their taxes.
“In fact, the Inland Revenue Authority of Singapore is involved in a technical assistance project with Sri Lanka in the revenue department.” development.
China, its main lender, has extended up to US$10 billion (S$14.3 billion) in funding since 2009, Mr Mahendran said, adding that refinancing on this front is another priority for him.
Immediate focus is to stabilise Sri Lanka’s currency market amidmoves to liberalise its exchange rate in a bid to attract foreign capital, he noted.
Last Friday, the CBSL announced that it will cease quoting a reference rate for the Sri Lanka rupee, allowing market forces to determine the exchange rate. Following the announcement, the currency slipped over 3 per cent to 139 against the United States dollar, a record low.
Mahendran’s decision marked the latest regional currency devaluation triggered by a similar move by China last month. But divergent monetary policies between the US and Europe, and highly uncertain global growth are not making the adjustments easy, he added.
“Juggling all this is a challenge... Growth in the US will hopefully pick up further, but Europe and Japan remain a big question mark.
That is the conundrum for us - to manage external volatilities while preserving the situation in the local markets,” he said.
www.dailynews.lk
Central Bank of Sri Lanka (CBSL) Governor Arjuna Mahendran told The Straits Times last week that he has his work cut out for him, particularly as he took up the position only in January. “International currency volatility is very damaging to a lot of emerging economies and commodity exporters like Sri Lanka. Managing that impact is going to be a challenge,” Mahendran said.
“Domestically, revenue is the key thing that we need to fix. A lot of work has to be done, to reorient the way taxes are collected in Sri Lanka,simplifying them, making it easier for taxpayers to pay their taxes.
“In fact, the Inland Revenue Authority of Singapore is involved in a technical assistance project with Sri Lanka in the revenue department.” development.
China, its main lender, has extended up to US$10 billion (S$14.3 billion) in funding since 2009, Mr Mahendran said, adding that refinancing on this front is another priority for him.
Immediate focus is to stabilise Sri Lanka’s currency market amidmoves to liberalise its exchange rate in a bid to attract foreign capital, he noted.
Last Friday, the CBSL announced that it will cease quoting a reference rate for the Sri Lanka rupee, allowing market forces to determine the exchange rate. Following the announcement, the currency slipped over 3 per cent to 139 against the United States dollar, a record low.
Mahendran’s decision marked the latest regional currency devaluation triggered by a similar move by China last month. But divergent monetary policies between the US and Europe, and highly uncertain global growth are not making the adjustments easy, he added.
“Juggling all this is a challenge... Growth in the US will hopefully pick up further, but Europe and Japan remain a big question mark.
That is the conundrum for us - to manage external volatilities while preserving the situation in the local markets,” he said.
www.dailynews.lk
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