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History of Central Bank of Sir Lanka
To accommodate dynamic economic and financial system developments upon gaining independence in 1948, the post-independence Government of Ceylon established the Central Bank of Ceylon to maintain an active monetary policy regime and a dynamic financial sector to support and promote economic growth. As well as prior to the establishment of the central bank, the Currency Board System set up under the Paper Currency Ordinance No.32 of 1884 functioned as the country’s Monetary Authority, though very narrow in its capacity. 
Technical expertise to establish a central bank was sought from the United States of America (USA) in July 1948, with Mr. John Exter. The Exter Report on the rationale and the legal framework for a central bank was presented to the House of Representatives in November 1949. Along with this report, a draft bill with explanatory comments was presented as part II of the report. The Bill was passed by the House as the Monetary Law Act No. 58 of 1949 on 25 November 1949, paving the way for the establishment of the Central Bank of Ceylon and an end to the Currency Board System. 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 (CBSL) in 1985.

The objectives of the Central Bank as specified in the MLA in 1949 were,
·         The stabilisation of domestic monetary values (maintenance of price stability).

·         The preservation of the par value or the stability of the exchange rate of the Sri Lankan Rupee (maintenance of exchange rate stability).

·          The promotion and maintenance of a high level of production, employment and real income in Sri Lanka.

·         The encouragement and promotion of the full development of the productive resources of Sri Lanka.

There are two main objectives of Central Bank,
  1. 1.             The maintaining of economic and price stability

2.      The maintaining of financial system stability

Comments

  1. UnknownJuly 19, 2019 at 3:39 AM

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    ReplyDelete
  2. AnonymousJuly 19, 2019 at 3:50 AM

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    ReplyDelete
  3. Giyanthi IreshaJuly 19, 2019 at 4:19 AM

    This is a valuable article.. Thanks for sharing..

    ReplyDelete
  4. LasiniJuly 19, 2019 at 6:28 AM

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    ReplyDelete
  5. DilJuly 21, 2019 at 7:35 AM

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    ReplyDelete

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