‘Excessive rupee depreciation: Both currency and public lose’: Central Bank responds

• The Central Bank sent the following response yesterday to the article titled ‘Excessive rupee depreciation: Both currency and public lose’ by P. Samarasiri that appeared in Daily FT on 11 October:

The attention of the Central Bank of Sri Lanka has been drawn to an article titled ‘Excessive rupee depreciation: Both currency and public lose’ written by P. Samarasiri that appeared in Daily FT on 11 October. 

With regard to the views expressed on the movements of the exchange rate, Samarasiri and the  interested general public may refer to the recent response of the Central Bank of  Sri Lanka on a similar misleading article (web link to the Central Bank response:  https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/statistics/otherp ub/20181011_cb_response.pdf).

The Central Bank is also surprised to note that Samarasiri, being a recently retired Deputy Governor, is unaware of the notable improvements within the Central Bank in relation to macroeconomic modelling and forecasting, which have made the process of monetary policy decision-making evidence based and forward looking. 

It is, therefore, misleading to conclude, as Samarasiri has done, that the Central Bank has a flawed framework for monetary policy formulation, at a time when significant improvements are being made in the process of transitioning to a flexible inflation targeting regime.