Central Bank’s Monetary Policy Consultative Committee changed

By Charindra Chandrasena

The Central Bank of Sri Lanka (CBSL) has reconstituted the Monetary Policy Consultative Committee (MPCC), which is in place to enable the Monetary Board to obtain views of the stakeholders of the economy for monetary policy decision making. 

Reliable sources told The Sunday Morning Business that only two members of the previous committee, which was in place from 2015 to 2019, have been retained. 

They are University of Colombo Professor of Economics Sirimal Abeyratne, who has retained Chairmanship of the MPCC, and Lakshman Kadirgamar Institute of International Relations and Strategic Studies Global Economy Programme Chair Dr. Ganeshan Wignaraja.

Econsult Asia Managing Director Dr. Kenneth De Zilwa was the first appointment to the committee at the beginning of this year. Subsequently, Raigam Marketing Services (Pvt.) Ltd. Chairman/CEO Dr. Ravi Liyanage, Micro Cars (Pvt.) Ltd. Chairman/CEO Dr. Lawrence Perera, Nature’s Beauty Creations Ltd. Chairman/Managing Director Samantha Kumarasinghe, Brandix Lanka Ltd. CEO Ashroff Omar, Java Institute for Advanced Technology Chairman Dr. Ishantha Siribaddana, Access Engineering PLC Managing Director Christopher Joshua, and London Executive Coaching and Consulting Founder/Chairman Udaya Indrarathna have been added to the committee.

These 10 members have replaced the former committee which, in addition to Abeyratne and Dr. Wignaraja, comprised of business tycoon Sohli Captain, JB Securities CEO Murtaza Jafferjee, Lion Brewery (Ceylon) PLC CEO Suresh Shah, Ceylon Biscuits Ltd. Managing Director Shea Wickramasinghe, the then Chief Economist of the Ceylon Chamber of Commerce Anushka Wijesinha (who resigned early this month) and former Unilever Sri Lanka Chairman/CEO Amal Cabraal.

Institute of Policy Studies of Sri Lanka (IPS) Executive Director Saman Kelegama was the original Chairman of the committee, but following his sudden demise in 2017, the position passed on to Prof. Sirimal Abeyratne.

The changes are believed to have been brought about as CBSL Governor Prof. W.D. Lakshman, following his appointment in late 2019, wanted a committee which aligned with his nationalistic economic policies as opposed to the more neoliberal policies of the previous Government.

The idea behind the MPCC is that it consists of a cross-section of stakeholders including eminent professionals, academics, and private sector personnel so that the CBSL’s Monetary Board benefits by their expertise and experience in its monetary policy decision-making process.

However, economists have expressed reservations about the composition of the new committee, particularly for its limited diversity compared to the previous committee. For example, there is little FMCG/Consumer sector representation unlike earlier when there was Shea Wickramsinghe and Suresh Shah.

“For the MPCC it always helps to have a view from this sector given that it’s a good real time barometer for activity in the the economy – one which the Central Bank does not get in real time since their data is lagged,” one economist told us on condition of anonymity.

Another economist pointed to the fact that the new committee does not include a member from a diversified conglomerate.

“There’s no one with a view of multiple sectors – from a conglomerate or with a diversified portfolio. Previously, there was Amal Cabraal who provided this insight since he was on the Director Boards of multiple companies in different sectors.”

Our attempts to obtain a confirmation of the new committee and its membership proved unsuccessful as the Central Bank told us that they were not willing to divulge the identities of neither the former committee nor the new committee as it was an internal matter within the Central Bank. It added that the new committee is not altogether finalised as letters had not been handed over to several new appointees.