Economy Forward

I felt very sorry for Wijewardena’s efforts made in his article titled "Who has printed the biggest quantity of money? Lakshman, Cabraal or Nandalal?" published in the Daily FT 29 th November to lift Nandalal Weerasinghe to the esteem of HNS Karunatilake and AS Jayawardena in the hindsight of tribal monetary concepts. I felt that people should retire before reaching the old age that begins Parkinson to destabilize the brain and body punctuality which has potential of creating grave conflicts in the civil society management. In his article, Wijewardena uses monetary concepts from John Law in early 18th century and monetary statistics of reserve money, money supply, money creation and lagged transmission used in 1950s-1980s with old definitions of money as a medium of exchange. However, modern central banks do not resort to these concepts to drive the monetary policy being another adamant line of state bureaucracy for public catastrophe although such statistics are regularl...

  Lanka News Web has reported two news items given below. 1. State Finance Minister Shehan Semasinghe assets "that prudent economic fundamentals are being deployed towards economic stabilization and to raise the economic growth rate to around 7%-8% in the next two years." 2. CB Governor Nandalal Weerasinghe says new Act to "strengthen Central Bank Independence" and thereby curb monetary financing of the budget and place a check on inflation" is to be enacted shortly: new law said to be a "prior action" to unlock the IMF deal that is yet to take place even after 8-1/2 months of negotiation. The purpose of this article is to educate readers of some of public issues involved in the two news items as highlighted below. Prudent Economic Fundamentals It would be better if the Minister states; What are those prudent economic fundamentals, at least a list, From where those are bought to be deployed? What is their link to  economic stabilization and to econo...

The Monetary Board at its meeting held on 23rd has decided to maintain its policy interest rates at current levels of 14.5% and 15.5%, despite the continuance of hyper-inflationary pressures. The contents of the press release issued on 24th are clear evidence that the Monetary Board has no clue whatsoever as to what the monetary policy should be for the bankrupt Sri Lankan economy in terms of the public mandate given to it by the Monetary Law Act. Therefore, the purpose of this article is to establish the meaninglessness of the monetary policy as revealed from the contents of its press release.  My comments are given below under 6 categories of contents in the press release.  Overall, the press release is formal evidence for Monetary Board's inability to carry out a sort of monetary policy to assist the government and general public to recover the economy from the current bankruptcy caused by the monetary policy itself. Therefore, the mandate given to the Monetary Board b...