IMF Demands Ouster of Central Bank Governor as a Condition for Assistnce; So Gota Asks Cabraal to Resign but he Appeals to Mahinda who Tells Ajith Nivard “ to quietly step down from his position, without further delay, as it would be better for him to do so”

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BY Ruwani Fonseka

It is speculated that Central Bank of Sri Lanka (CBSL) alGovernor Ajith Nivard Cabraal will resign soon, after orders by President Gotabaya Rajapaksa and subsequent advice received from Prime Minister Mahinda Rajapaksa, in light of President Rajapaksa’s discussion with officials from the International Monetary Fund (IMF) on Tuesday (15), The Morning reliably learnt.

According to sources privy to the matter, the first condition stipulated by the IMF in its extension of technical assistance to Sri Lanka in connection with overcoming the prevailing economic crisis, called for the replacement of CBSL Governor Cabraal.

“The IMF representative who had arrived in Sri Lanka to speak to President Rajapaksa had discussed various debt restructuring and bond repayment methods that would help Sri Lanka ease this financial crisis while emphasising that the first priority was for Cabraal to resign. President Rajapaksa had informed Cabraal to resign today (16) morning.

However, Cabraal had thereafter spoken to Premier Mahinda Rajapaksa, and explained that it was unconstitutional to dismiss him,” the source mentioned yesterday (16). The source further revealed that Prime Minister Rajapaksa had subsequently requested Cabraal to “quietly” step down. “Prime Minister Rajapaksa, in response, had told Cabraal to quietly step down from his position, without further delay, as it would be better for him to do so,” the source added.

Additionally, the source noted that current Treasury and Finance Ministry Secretary S.R. Attygalle is tipped to take over the CBSL in Cabraal’s stead. However, The Morning’s attempts to contact Attygalle in this regard proved unsuccessful.

Earlier, Cabraal had told foreign media outlets that Sri Lanka does not need an economic lifeline from the IMF, claiming that the country is able to finance its outstanding debt, especially international sovereign bonds, “without causing any pain to our creditors”.

He had also told the local media that if Sri Lanka was to seek the IMF’s assistance, the fund might require the Government to depreciate the Sri Lankan rupee, increase interest rates, cut down the number of public servants, slash pension schemes, and sell state properties, which is a reform agenda that the Government is not willing to comply with.

However, in February this year, Finance Minister Basil Rajapaksa confirmed that the Government had written to the IMF requesting technical assistance, and that a mission from the IMF would visit Sri Lanka for this purpose.

Accordingly, IMF Asia and Pacific Department Director Changyong Rhee met with President Rajapaksa on Tuesday at the Presidential Secretariat. He was accompanied by IMF Asia and Pacific Department Deputy Director Anne-Marie Gulde-Wolf and IMF Resident Representative for Sri Lanka and the Maldives Tubagus Feridhanusetyawan.

Courtesy;The Morning