CB Chief Mahendran rebuts Insider; sets record straight

Right of Reply

Further to the article by an anonymous writer carried in the 11 May edition of the Daily FT entitled ‘What is expected of Central Bank Governor?’ Central Bank Governor Arjuna Mahendran has sent the following correction since there were some factual inaccuracies in the said article.

The writer has sought to compare my conduct with that of a former Governor. No mention is made of the billions of rupees lost to the Central Bank and the Government through controversial dealings of that Governor such as the oil hedging issue, the Greek bonds issue and the purchase of gold into the Sri Lanka Government reserves at very high prices. I have dealt with these issues in a previous article which can be found at http://www.ft.lk/article/456211/Arjuna-rebuts-Nivard--says-not-to-attack-CB-for-narrow-political-ends.

Meanwhile, I wish to state for the record that the assertion that I have been associated with auctions of Government bonds that have not been fully investigated is not accurate. The issue of the bond issue of 29 February 2015 was taken up by the Supreme Court on 13 May 2015 (SC FR No 107/2015) and all charges against me and other dependents were dropped. The allegation that I have used State funds to buy myself attire is factually wrong since this transaction was done using my personal funds. Carrying such statements without ascertaining the facts are grounds for libel and I would be grateful if you could make this correction.

The writer has also stated that there were similar issues when I was the Chairman, BOI. For the record, the Commission to investigate Allegations of Bribery or Corruption considered a petition after my tenure at the BOI and was unable to prove any wrong doing.

Your writer, regrettably, keeps levelling unsubstantiated accusations against me. On the question of the issue of Government bonds in 2016, the Monetary Board of Sri Lanka has investigated the issue surrounding recent bond auctions and will publish its findings shortly.

I hope your respected newspaper will in future focus more on the substantive policy initiatives of the present Government including efforts to streamline the conduct of monetary policy under the present Monetary Board. Key features of recent reforms include implementing a market-determined system for the determination of interest rates and exchange rates in Sri Lanka.

The effectiveness in the conduct of monetary policy should be the ultimate yardstick by which the conduct of the Governor of the Central Bank of Sri Lanka and the Monetary Board should be determined. Other issues such as the sartorial preference of Governors etc. should be incidental and only be given serious consideration if there is factual evidence to support any allegations of any misdemeanour. I trust you will give this article the prominence which your anonymous writer was afforded in the newspaper dated Wednesday, 11 May.