By Hiran H.Senewiratne
"An artificial boost for the capital market will not help the country. Such moves could prove disastrous, Central Bank Governor Dr. Indrajit Coomaraswamy said.
"The Central Bank aims to create a stable environment for companies to grow and make higher profits but there will be no quick fix sugar highs. Therefore, we are looking forward to regulate the artificial movement in the capital market for the betterment of the country, Coomaraswamy said.
"When you look around in many countries you often see government regulators trying to create artificial momentums in markets. The record of such initiatives has invariably been disappointing. You find that pretty much all players are in a worse situation, the Governor said after 'ringing the bell' at the Colombo Stock Exchange to kick off trading yesterday, ahead of taking a policy decision later in the day.
Coomaraswamy said the Central Bank will try to create a stable economic environment where fundamentals are strong and companies could make profits and generate employment."The government is starting a stabilization program and has already set in motion measures to improve budget deficits, he said. Prime Minister Ranil Wickremesinghe is also expected to come out with a detailed 5-year plan.Though Sri Lanka's stock market is not going through "the best of times" now, he said if investors had confidence in these measures, "Sri Lanka would be a buying opportunity."
The Governor said the world is still trying to recover from the massive housing and commodity bubble fired by then US Fed Chief Alan Greenspan and his depression era specialist sidekick Ben Bernanke who cut interest rates to historic lows from around 2001. He kept them at one percent for too long in what some economists called the 'Mother of all liquidity bubbles'.
"An artificial boost for the capital market will not help the country. Such moves could prove disastrous, Central Bank Governor Dr. Indrajit Coomaraswamy said.
"The Central Bank aims to create a stable environment for companies to grow and make higher profits but there will be no quick fix sugar highs. Therefore, we are looking forward to regulate the artificial movement in the capital market for the betterment of the country, Coomaraswamy said.
"When you look around in many countries you often see government regulators trying to create artificial momentums in markets. The record of such initiatives has invariably been disappointing. You find that pretty much all players are in a worse situation, the Governor said after 'ringing the bell' at the Colombo Stock Exchange to kick off trading yesterday, ahead of taking a policy decision later in the day.
Coomaraswamy said the Central Bank will try to create a stable economic environment where fundamentals are strong and companies could make profits and generate employment."The government is starting a stabilization program and has already set in motion measures to improve budget deficits, he said. Prime Minister Ranil Wickremesinghe is also expected to come out with a detailed 5-year plan.Though Sri Lanka's stock market is not going through "the best of times" now, he said if investors had confidence in these measures, "Sri Lanka would be a buying opportunity."
The Governor said the world is still trying to recover from the massive housing and commodity bubble fired by then US Fed Chief Alan Greenspan and his depression era specialist sidekick Ben Bernanke who cut interest rates to historic lows from around 2001. He kept them at one percent for too long in what some economists called the 'Mother of all liquidity bubbles'.
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