Central Bank of Sri Lanka was established under the Monetary Law Act (MLA) 58 in 1950. The
Central Bank of Sri Lanka is the apex bank in Sri Lanka.
The Objectives of the
Central Bank of Sri Lanka are two pronged:
- Maintenance of a stable financial system
- Maintenance of price and economic stability
By maintaining these dual objectives
The Central Bank in Sri Lanka strives in developing the productive local resources.
In addition to the two objectives
The Central Bank of Sri Lanka performs Ancillary Functions, and Agency Functions. The Ancillary function includes Currency Issue and management.
The Agency Functions performed by The
Sri Lankan Central Bank may be classified into:
- Public Debt Management
- Foreign Exchange Management
- Employees' Provident Fund Management
- Regional Development
Monetary Policy
Maintenance of price and economic stability is effected by a sound monetary policy. A sound monetary policy is and its effective usage is the primary concern of The
Central Bank of Sri Lanka. Monetary Policy involves the availability of money to the public. This availability can be effected by changing lending rates, regulating bank reserve ratios, and issuance of bonds.
Financial Policy
The
Sri Lankan Central Bank ensures financial stability by regulating commercial banking activities. The
Central Bank of Sri Lanka does this by modifying loan payment periods and loan interest rates, changing insurance rates, regulating provident fund interest rates and the like.
Currency Management
It is the responsibility of the
Central Bank of Sri Lanka to make available sufficient currency in the market. It also strives to maintain the quality of the currency notes and coins in circulation. Design, distribution, and protection of currency notes are the responsibility of The
Central Bank of Sri Lanka
