Central Bank of Srilanka
The Central Bank of Ceylon was set up by the post independence Government in recognition of the importance of an active monetary policy regime and a dynamic financial sector to support and promote economic growth.
Prior to the establishment of the Central Bank, functions relating to central banking were conducted by the Currency Board System that was set up under the Paper Currency Ordinance No.32 of 1884.
After gaining political independence, the Currency Board System was considered inadequate and unsuitable for meeting the needs of a developing country and an independent nation. Therefore, in July 1948, the Government of Ceylon requested the United States Government for technical expertise to set up a central bank, which resulted in Mr. John Exter, an economist from the Federal Reserve Board of the USA being appointed to carry out this task. | Mr. John Exter | |
The Exter Report on the rationale and the legal framework for the Central Bank was presented to the Government of Ceylon in November 1949 and led to its formation. The Central Bank of Ceylon was established by the Monetary Law Act (MLA) No.58 of 1949 and commenced operations on August 28, 1950. It was renamed the Central Bank of Sri Lanka in 1985.
The Central Bank was given wide powers to administer and regulate the entire money, banking and credit system of the country. The Central Bank was also given the sole right and authority to issue currency and it also became the custodian of the international reserves of the country. The objectives of the Central Bank as specified in the MLA in 1949 were; a ) | The stabilisation of domestic monetary values (maintenance of price stability). | b ) | The preservation of the par value or the stability of the exchange rate of the
Sri Lankan Rupee (maintenance of exchange rate stability). | C ) | The promotion and maintenance of a high level of production, employment and real income in Sri Lanka. | d ) | The encouragement and
Prior to the establishment of the Central Bank, functions relating to central banking were conducted by the Currency Board System that was set up under the Paper Currency Ordinance No.32 of 1884.
After gaining political independence, the Currency Board System was considered inadequate and unsuitable for meeting the needs of a developing country and an independent nation. Therefore, in July 1948, the Government of Ceylon requested the United States Government for technical expertise to set up a central bank, which resulted in Mr. John Exter, an economist from the Federal Reserve Board of the USA being appointed to carry out this task. | Mr. John Exter | |
The Exter Report on the rationale and the legal framework for the Central Bank was presented to the Government of Ceylon in November 1949 and led to its formation. The Central Bank of Ceylon was established by the Monetary Law Act (MLA) No.58 of 1949 and commenced operations on August 28, 1950. It was renamed the Central Bank of Sri Lanka in 1985.
The Central Bank was given wide powers to administer and regulate the entire money, banking and credit system of the country. The Central Bank was also given the sole right and authority to issue currency and it also became the custodian of the international reserves of the country. The objectives of the Central Bank as specified in the MLA in 1949 were; a ) | The stabilisation of domestic monetary values (maintenance of price stability). | b ) | The preservation of the par value or the stability of the exchange rate of the
Sri Lankan Rupee (maintenance of exchange rate stability). | C ) | The promotion and maintenance of a high level of production, employment and real income in Sri Lanka. | d ) | The encouragement and