The Hon. Ravi Karunanayake

¶ 01 Hon. Speaker, I rise under Standing Order 27(2) to question the Minister of Finance, Planning and Economic Development regarding accountability of the Central Bank of Sri Lanka (CBSL).

¶ 02 It is of deep concern that CBSL has failed to meet inflation and monetary policy targets in at least five of the last six quarters, despite operational independence and the legal mandate to maintain price stability under the Central Bank of Sri Lanka Act, No. 16 of 2023, which states: “The Central Bank shall be autonomous and accountable.”

¶ 03 Independence must be matched by clear accountability. To whom is CBSL now accountable and through what mechanism? Repeated explanations citing fiscal slippage, external shocks and supply constraints cannot substitute for timely and effective independent monetary action. Recently, amidst renewed inflationary pressures, CBSL refrained from timely policy rate adjustments, undermining credibility. Since 15 September 2023, with the new Act in force, CBSL is fully independent and cannot hide behind fiscal dominance.

¶ 04 Therefore: 1. Why has CBSL continuously failed to meet its inflation targets over recent quarters? 2. Has CBSL compromised its independence due to fiscal dominance or external (IMF/political) constraints? 3. What structural reforms ensure true independence and accountability in inflation targeting? 4. Why has CBSL not proactively adjusted interest and exchange rate policy in response to emerging inflationary pressures? 5. Has the Monetary Policy Board conducted any self-assessment or published explanations under the IMF Programme’s accountability matrix for target misses? 6. Is the Government satisfied with CBSL’s performance on financial stability? If not, will institutional reforms be undertaken? 7. What steps ensure fine and efficient coordination between the Treasury and an independent CBSL? 8. If CBSL blames fiscal operations for its failures, does that not structurally negate its independence? 9. Will the Minister assure a credible, independent external review of CBSL’s monetary policy framework and current performance? 10. Under Section 5(2) of the 2023 Act, to whom are the Central Bank and the Governor accountable, how often, and how is that accountability enforced?

¶ 05 I request frank answers. Today CBSL is effectively the only independent institution, seemingly accountable to no one—not even to Parliament or the President—operating in a world of its own. I raise this in the interest of sound governance and national development.