New Central Bank Act goes into effect giving financial sector regulator more independence

• Acting Finance Minister Ranjith Siyambalapitiya says strict restrictions imposed on money printing
• CBSL pushed to work towards inflation targets
• Specifies qualification requirements of those appointed to boards of Central Bank

The new Central Bank Act, which paves the way for the financial sector regulator to be more independent, came into effect this week, with the law being certified by Speaker Mahinda Abeywardana. 
Commenting on the act, Acting Finance Minister Ranjith Siyambalapitiya said that strict restrictions are imposed on money printing. 
He noted that unlike before, money printing can be done only under limited and exceptional circumstances. 
“That opportunity is available only in the case of a special security problem in the country and a global health problem,” he said.  
Only an amount, not exceeding 5 percent of the value of the issued Treasury bills, can be printed. 
Further, the Central Bank will be pushed to work towards the inflation target. In the event the target is missed, the monetary watchdog will have to justify the shortfall. 
While pointing out that the Treasury Secretary does not participate in the selection of the General Board of Governors and Monetary Policy Board of the Central Bank, Siyambalapitiya shared that the new act specifies the qualification requirements of those appointed as board members. 
He went on to assert that Parliament would have the power to summon the Governor of the Central Bank. 
The Central Bank Act received the parliamentary approval in July, with amendments. The new act is part of the reform requirement linked to the International Monetary Fund 
bailout package.