The International Monetary Fund (IMF) last week suggested the Central Bank should demonstrate a high degree of transparency on the benchmarks used to determine the recent salary hike.

“We don’t have much to say with respect to the salary hike. What’s important is that there be a high degree of transparency on the part of the Central Bank to explain how it is benchmarking its decisions. 

And the key is to preserve Central Bank independence,” IMF’s Senior Mission Chief for Sri Lanka Peter Breuer told journalists in response to a question about CBSL’s sharp salary hike which had caused much controversy.

Breuer stressed that Central Bank independence is an absolutely key pillar under the IMF’s Extended Fund Facility program. 

“The Central Bank Act has long been in the making and when that was achieved, it achieved a key objective,” he said. It was noted that an independent Central Bank can set monetary policy according to the needs in order to keep inflation down in line with its objectives. “Before this was achieved, there was a significant degree of monetary financing in Sri Lanka, which was one of the key contributors to the very high inflation Sri Lanka experienced,” he added.

 

CBSL senior management to revisit recent salary revision