Sri Lanka's Central Bank, which has come under fire for lax monetary policy, printing money to finance the budget deficit and boosting inflation, took the somewhat unusual step of publicly responding to the International Monetary Fund's hard hitting staff report on the country's recent weak macro-economic management. Sri Lanka's Central Bank, which has come under fire for lax monetary policy, printing money to finance the budget deficit and boosting inflation, took the somewhat unusual step of publicly responding to the International Monetary Fund's hard hitting staff report on the country's recent weak macro-economic management. The Central Bank said the economy had improved since the time the report was compiled (April 2005) during the IMF annual Article IV consultations and when it was released (September 2005).
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"The economic conditions have continued to improve since the IMF staff visit to Sri Lanka in April 2005," Central Bank said in a special press release made public on Saturday.
"The economic growth has improved, inflation has moderated, international trade has improved, foreign flows have increased, balance of payments has recorded a surplus, official reserves have risen to over three months of imports, fiscal consolidation has continued and monetary policy has been tightened to contain monetary expa
