Sri Lanka policy certainty higher after polls: CB Governor

(From left) Dharmasri Kumaratunga, Director - Payments and Settlements, Central Bank; Nanda Fernando, Managing Director, Sampath Bank; and Tharaka Ranwala, Head of Operations and Group Chief Marketing Officer, Sampath Bank

Jan 28, 2010 (LBO) – Sri Lanka’s policy direction is clearer after a President Rajapaksa was returned to power with a bigger majority allowing investors to emerge from any ‘wait and see’ attitude, a top official said. “The mandate means we have a clear path chartered for the next six years,” Central Bank governor Nivard Cabraal said.

“We have eliminated the war. We have obtained a mandate from the people. We have put forward a plan of action in the Mahinda Chinthana (Rajapaksa’s platform).”

Though parliamentary elections are due before April 2010, Cabraal said the policy path is already set.

“The presidential elections has made certain of the outcome of the parliamentary elections,” Cabraal said.

“There is no need to wait and see. Investors could set their plans in motion, notwithstanding the elections.”

Cabraal said the government was committed to a fiscal consolidation of bringing down the budget deficit. For 2009 the government set a 7.0 percent target and 6.6 percent for 2010.

The mandate would strengthen the government’s hand to act on the basis of a report of a taxation commission that is being prepared.

“We have committed ourselves to a certain consolidation path,” he said.