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Sri Lanka should persist with stabilization measures: business chamber

June 13, 2012 (LBO) - Sri Lanka's Ceylon Chamber of Commerce says the state should persist with measures efforts to correct balance of payments pressure and learn lessons to make sure that such incidents are not repeated.
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"Macroeconomic stability is a crucial element of a conducive investment climate and favourable operating environment for business," the Ceylon Chamber said.



"Above all, it protects the living standards of ordinary people.


"

Sri Lanka's currency had depreciated ever since a Central Bank which can control both the exchange rate and interest was created in 1951 to join the failed Betton Woods system of unstable pegs.

Before 1951, Sri Lanka had a currency board, where the exchange rate was fixed (hard pegged) but the interest floated, allowing free movement of capital.

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Some analysts have called for the abolition of the Central Bank and the re-establishment of a currency board to regain freedom from currency depreciation and inflation, which became chronic problem after gaining self-determination from British rule.

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Analysts have called for formula based energy pricing to end arbitrary interventions rulers in energy tariffs.

Formula based pricing was first implemented after a b

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