Was the Central Bank Bill put on hold to allow the government to print an extra LKR 1 Trillion?

Colombo (News 1st) - Controversy surrounds the government’s halting of the Central Bank Bill, with suspicions that the suspension was in order to allow the printing of an additional LKR 1 trillion.

The government last week announced that it would ask Parliament to raise the borrowing limit for Treasury Bills from LKR 5 trillion to LKR 6 trillion.

Opposition MP Patali Champika Ranawaka said in Parliament today (Friday) that the Opposition did not request the debate on the Central Bank Bill to be delayed by the government, and neither was it due to the need to debate the X-Press Pearl disaster. He said it was suspended in order to  allow the printing of an additional LKR 1 trillion by the government, which would not have been possible if the Central Bank had been made more independent as per the Central Bank Bill.

The Central Bank Bill was presented to Parliament on March 7, 2023, by Leader of the House Susil Premajayanth, as a condition set by the International Monetary Fund (IMF) in providing its latest loan. It was scheduled to be debated on May 11. But it was abruptly withdrawn, with the explanation that the bill needed some amendments and would be presented again.

The Bill had drawn praise as an attempt to establish a more independent Central Bank under a Board of Governors, but also drew criticism that it would loosen Parliamentary control over government finances.

The Central Bank Bill was originally drafted in 2019, but was pushed aside by the Gotabaya Rajapaksa regime.