The Central Bank of Sri Lanka’s (CBSL) Monetary Board decided to increase the policy interest rates today (24 March) not due to any pressures from the International Monetary Fund (IMF), said CBSL Governor Dr. Indrajit Coomaraswamy in response to a query by Ad Derana.

“We focused on several factors like inflation, balance of payment etc. If this decision is not taken now while considering all these factors, we realised that there would be a further increase in inflation in the future. We prepare our monetary policies while looking at the future. We expect to take necessary action with an eye on the future rather than delay implementing the decisions and taking action once a crisis situation has emerged. That is why we took this decision.

“Furthermore, our attention was focused on external factors as well. There are possibilities of investments in Sri Lanka going out since the interest rates have gone up in the United Kingdom. This would not happen now. Similarly, it would discourage investments into the country. We took this decision after considering all these.

“Despite the IMF urgings, we took this decision after having analyzed our economy. We have not carried out everything the IMF had wanted us to do. We discussed deeply with the IMF. We put forward our arguments and now we are in a better position.

“I think we could reach an agreement when we visit Washington in April. However, we are implementing these within our own framework. We have provided the framework. They arrive once in a few months for monitoring. Our activities are proceeding well now,” said Dr. Coomaraswamy.