Saturday, 11 July 2020 07:11

Central Bank defends its money printing to provide liquidity to banks

The Central Bank of Sri Lanka defended its money printing and stated that the bank has the necessary instruments to mop up excess liquidity if the need arises.

“Excess liquidity is a result of Central Bank’s pumping money into the system and it id the prime responsibility of any Central Bank to provide sufficient liquidity to the banking system and also to ensure that the public has sufficient currency in their hands, especially in unusual or exceptional circumstances like the resent situation

This was stated by Senior Deputy Governor of the Central Bank Dr. Nandalal Weerasinghe whilst addressing the monetary policy meeting in Colombo.

"If CB authorities didn’t do that there would certainly be a liquidity crunch and measures that have implemented during this COVID-19 period it clearly explains that because of pumping sufficient liquidity into the system people have been able to conduct their transactions smoothly.

There has been sufficient money in the banking system for them to meet their day-to-day needs in this difficult period,” Dr.Weerasinghe added.

y overheating of the economy in terms of growth rate and also no balance of payments (BOP) impact has been reported.

(LIN)

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