Central Bank reserves: Who is saying what?

Central Bank Governor Nandalal Weerasinghe gave an ultimatum during a media briefing this week on the dire state of the economy and the consequences of not having a stable government in place as the economic crisis deteriorated with more queues for essential items and fuel.

As a professional, he also expressed concerns about continuing in his post in the absence of a government and said he would have to resign from his post if a stable government failed to take office within the next two weeks.

What many were not aware of is the fact that when he took over nearly a month ago on April 13, the Central Bank's usable reserves were merely US$ five million. This was disclosed by former CB Governor Indrajit Coomarasamy during a panel discussion on the status of the economy. It was organised by the Ceylon Chamber of Commerce.

However, on the following day, then Finance Minister Ali Sabry told the Parliament the official reserves were nearly US$ 50 million.

A few days later, an International Sovereign Bond (ISB) coupon maturing had to be paid.

"Ïf we did not do it on April 13, we would have had a hard default because we would not have been able to pay the coupon," Dr Coomsaraswamy said.