![](https://i.imgur.com/CLvY2jA.png")
12-12-2022, 07:39 AM
https://economynext.com/sri-lanka-ignore...ir-105637/
Hashim said the advice was ignored and it was a lost opportunity for Sri Lanka.
Critics say the problem is found throughout South Asia and any other country with monetary and external troubles.
A survey by the World Bank had come up with a shocking revelation that only 2 percent of ‘experts’ surveyed by the agency recently knew that balance of payments problems were created by central banks.
Related South Asia, Sri Lanka currency crises; only 2-pct know monetary cause: World Bank survey
Ignored advice from Singapore
Goh was not simply an academic economist who gave advice but a politician and a practitioner who ran Singapore based on currency board principles and gave stability for his country to grow.
President Jayewardene summoned Goh Keng Swee as the country was about to go the IMF after experiencing balance of payments troubles after he liberalized the economy a little over two years earlier and the country was experiencing strong growth.
Economists in Sri Lanka were printing money to keep rates down when Goh came and inflation was already in the double digits.
“There have been a relentless increase in the issue of Treasury bills and unless the process is immediately stopped, the country faces the near-certainty of galloping inflation,” Shenoy told J R.
“…[T]he result would be a run of the country’s foreign exchange reserves or a depreciation of the currency’s rate of exchange or both. In Sri Lanka both these have occurred in the course of 1980.”
Goh warned Sri Lanka against depreciating the currency again, which had become fashionable in Washington policy making circles that were peddling advice to troubled third world countries, though the US itself was clean floating by then.
Hashim said the advice was ignored and it was a lost opportunity for Sri Lanka.
Critics say the problem is found throughout South Asia and any other country with monetary and external troubles.
A survey by the World Bank had come up with a shocking revelation that only 2 percent of ‘experts’ surveyed by the agency recently knew that balance of payments problems were created by central banks.
Related South Asia, Sri Lanka currency crises; only 2-pct know monetary cause: World Bank survey
Ignored advice from Singapore
Goh was not simply an academic economist who gave advice but a politician and a practitioner who ran Singapore based on currency board principles and gave stability for his country to grow.
President Jayewardene summoned Goh Keng Swee as the country was about to go the IMF after experiencing balance of payments troubles after he liberalized the economy a little over two years earlier and the country was experiencing strong growth.
Economists in Sri Lanka were printing money to keep rates down when Goh came and inflation was already in the double digits.
“There have been a relentless increase in the issue of Treasury bills and unless the process is immediately stopped, the country faces the near-certainty of galloping inflation,” Shenoy told J R.
“…[T]he result would be a run of the country’s foreign exchange reserves or a depreciation of the currency’s rate of exchange or both. In Sri Lanka both these have occurred in the course of 1980.”
Goh warned Sri Lanka against depreciating the currency again, which had become fashionable in Washington policy making circles that were peddling advice to troubled third world countries, though the US itself was clean floating by then.
