He told reporters in Colombo after the announcement of the monthly monetary policy that government revenue fell with higher expenditure opening doors for a possible tax slip. The Monetary Council decided to keep policy interest rates at its present level at its recent monetary policy conference.
“Why this time the currency board decided not to decrease policy prices is to wait and see the complete impacts of all that has been accomplished so far,” said Coomaraswamy. On 31 May 2019, the central bank has taken several recent steps, including 50 basis points for reducing policy prices.
The bank has also implemented maximum interest rates on products from April and made significant injections of liquidity through SRR reductions.
“The impacts of the deposit cap that we would like to see in the coming weeks translate into credit rates also the government’s expenditure on each electorate of approximately 300 million under the Gamperaliya Programme,” “There’s a lot of cash going into the scheme, then we want to wait and see it play itself out before another appeal for interest rates.”
Coomaraswamy said that in a reduced stage of financial activity government revenues, including importation duties and taxes, have dropped. “This is all probably influenced so that additional expenses are also influenced by the government’s income,” he said.
“The government takes measures to review the whole budget and ensure it retains the budget structure overall while arguing against a relaxing policy, that fiscal slippage or possible fiscal slippage.”