Sep 29, 2014 (LBO) –Sri Lanka’s Supreme Court dismissed the Fundamental Rights application filed by Mr Sujeewa Arjune Senasinghe of Colombo 3 against the Monetary Board complaining that the Central Bank, in purchasing Greece Government Bonds, had acted in an unlawful, irresponsible and an arbitrary manner, Central Bank said in a media release. This decision was taken on 18th September 2014.
Media Release by Central Bank of Sri Lanka
In its judgment, the Supreme Court stated that the investment in Greece Bonds and its trade formed a part of the risk management strategy of the Central Bank and that if all investments were to be maintained as risk free investments, the return would be negligible.
The Central Bank therefore had to select a mix of low risk and risk bearing investments, expecting a reasonably high return.
We must not forget that in complex economic policy matters, every decision is necessarily empiric and therefore its validity cannot be tested on any rigid formula or strict consideration, Court was quoted in the media release.
The Court while adjudicating the constitutional validity of the decision of the Governor or International Operations Department 26th September 2014 Members of the Monetary Board must grant a certain measure of freedom considering the complexity of the economic