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Why was a central bank established in Sri Lanka in 1950? Could the government achieve its national objectives?

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Article's purpose and background The present central bank which was established on 14 September 2023 as a part of economic management package set out in the 2023 IMF Accord has recently released a press notice to inform the public of the closure of its Public Debt Department (PDD) effective from January 01, 2026  (Read the notice here) . The PDD is one of few Departments established under the Monetary Law Act (MLA) at the inception of the central bank on 28 August 1950. This news motivated me to write this short article in the national interest on the following background. The PDD served as the bread and butter for the implementation of the fiscal policy of the government and monetary policy of the central bank as set out in the MLA in the national interest during the past 76 years, given the fact that the Sri Lankan monetary system that was established by the MLA in 1950 was built on sovereign currency (Sri Lankan Rupee) supplied by the government through its fiscal spending and d...
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Trump's new 30% tariff against Sri Lanka. 2nd Sri Lankan default? Who will rescue now?

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  Article's purpose This short article highlights the failure of the Sri Lankan government to agree on a comprehensive trade deal with the US to benefit from the US economy and the new world trade order being laid by the US under its new trade and economic policy ( Read the policy article here) .  The short background of the article is as follows. The US President Donald Trump through his letter dated 9 July 2025 addressed to the Sri Lankan President has communicated the final reciprocal tariff rate of 30% on imports from Sri Lanka. This is a downward revision on the 44% reciprocal tariff imposed on Sri Lanka on 2 April 2025 to be effective from 9 April 2025 which was later suspended for 90 days. The formular for the initial 44% tariff was the half of the percentage of the US trade deficit with Sri Lanka in the total value of the US imports from Sri Lanka in the year 2024. Sri Lanka is one country out of almost all countries in the world who confronted such reciprocal tar...
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Central bank independence abused & lost? The Fed is now in trouble? Other central banks alerted.

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  Article's purpose and background This short article sheds some lights how the present management of the Fed (the US central bank ) has failed in the maintenance of so-called its independence, given its highly theoretical and arbitrary approach of the monetary policy framework .  This failure has been revealed by the current conflict between the Fed and the President Donald Trump which questions the reality of the central bank independence . The central bank independence is nothing but a hypothesis built by monetary economists who fail to understand that central banks and underlying monetary systems have been built and operate on money created on fiscal operations and debt . Therefore, the background of the article is summarized as follows. The origin of the present paper currency-based monetary systems operating in the world is the private bank notes and lending business. However,  in early 20th century, governments nationalized such monetary systems with the creati...
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Trump's trade deals. America to be new global export hub? Dollar debtors are bailed out?

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Article's purpose and background The purpose of this short article is to highlight that the objective of the US trade deals being negotiated at present is to make the US an export economy primarily through advanced manufacturing products in place of the present import economy.  Accordingly, trade deals are being designed to rebalance the global trade and economy in order for the US to become the leading export economy in the world. This is revealed from several official interviews of the US authorities such as the the US President, Treasury Secretary and Commerce Secretary , circulated in the media.  Therefore, this article is primarily based on views expressed by the US Commerce Secretary at a recent interview with CNBC ( Watch the interview here) . However, national leaders of many countries are seen making political statements that deals are being finalized to their favour to impress the public. This is completely wrong as the US has no interest other than cutting its tr...
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