No second chance’ to save Sri Lanka – Central bank chief

The man charged with clawing Sri Lanka out of bankruptcy says he had warned about economic calamity years before it hit — and was pressed into retirement for his troubles.

Central bank chief Nandalal Weerasinghe was asked to return to the island nation last year to help steer it through a financial collapse that triggered months of food shortages, petrol queues and nightly blackouts.

The 63-year-old says his mandate coincides with Sri Lanka’s one final opportunity to rescue itself from a cycle of economic shocks that stretches back decades.

“There’s no excuse this time, no second chance, we have to get it right this time,” he told AFP at his Colombo office this week.

“This is where I think crisis is an opportunity.”

Weerasinghe was the Central Bank of Sri Lanka’s number two when Gotabaya Rajapaksa was elected president in 2019 on populist promises of generous tax cuts.

Government debt soared as Rajapaksa pursued an unorthodox policy of printing exorbitant amounts of money while holding down exchange and interest rates to spur growth.

“As the senior deputy governor, I always raised concerns,” Weerasinghe said.

But with Rajapaksa’s administration steamrolling objections from him and other senior central bankers, Weerasinghe said he felt he had no option but to take early retirement.

“Obviously I saw if those policies continued in that way… we’ll end up in a situation that I said at that time was exactly what happened,” he added.

Weerasinghe had decamped for a quiet life in Australia, spending time with his children and hitting the golf course five days a week, when Rajapaksa asked him to come back and helm the central bank.

He returned to a country in chaos, its currency in freefall and the government days from defaulting on its $46 billion foreign debt.

AFP

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