Seigniorage

Apr 20, 2013 (LBO) – Sri Lanka’s central bank made 66 billion rupees in profits in 2012, up 41 percent from a year earlier, helped by gold trading and inflation, official data showed.

In 2010 when the Central Bank made only 11 billion rupees
in profits, Sri Lanka had a stable economy and low inflation.

The cost of sterilizing inflows, which help keep inflation down in stable times, could cause losses from a monetary authority’s domestic operations.

By end 2012 the Central Bank had gold reserves of 85 billion rupees. In the past few weeks there had been steep falls in the gold price.

Salaries and wages went up 26 percent from a year earlier to 2.8 billion rupees. There was a 344 million reversal in pension contributions.

In 2012 the Central Bank had paid 27 million rupees as legal fees to lawyers who appeared against a case by Deutsche Bank against Sri Lanka down from 324.37 million rupees a year earlier.

The Central Bank does not have to pay income tax and has been freed from an economic service charge from 2012.

The Central Bank had