As enacted

Contents

Central Bank of Sri Lanka Act 2023 · As enacted · Part IV · Inflation Target

26. Inflation target

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

The Minister and the Central Bank shall sign a monetary policy framework agreement with regard to setting out the inflation target to be achieved by the Central Bank.

(2)

In the event the Minister and the Central Bank are unable to reach an agreement with regard to the inflation target as referred to in subsection (1), the Minister shall place his proposal for the inflation target and that of the Central

Bank before the Cabinet of Ministers, and the Cabinet of

Ministers shall determine the inflation target to be achieved by the Centeral Bank.

(3)

The Minister shall publish the monetary policy framework agreement including the inflation target and other parameters relating thereto in the Gazette within a period of one week from the date of such agreement.

(4)

The Minister and the Central Bank may review the inflation target and any other parameters relating thereto, once in every three years or in such other intervals, if exceptional circumstances so warranted. The Minister shall, upon such review, publish in the Gazette the inflation target and other parameters relating thereto so reviewed and the exceptional circumstances that warranted such review.

(5)

If the Central Bank fails to meet the inflation target by a margin determined in terms of subsections (1) and (4) of this section for two consecutive quarters, the Monetary

Policy Board shall submit a report to Parliament through the

Minister, which shall also be made available to the public, setting out-

(a)

the reasons for the failure to achieve the inflation target;

(b)

the remedial actions proposed to be taken by the

Central Bank; and

(c)

an estimate of the time-period within which the inflation target shall be achieved.

(6)

The Monetary Policy Board shall determine the monetary policy and other instruments relating to the implementation of the monetary policy of the Central Bank and shall have the authority to adjust such instruments for the purpose of implementing the monetary policy.

Read on from s 27

Part V

Monetary and Other Operations

Read on from Part V

Part VI

Foreign Exchange Operations and International Reserves

Read on from Part VI

Part VII

Currency and Legal Tender

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Part VIII

Payment and Settlement Systems

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Part IX

Supervision and Resolution of Financial Institutions

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Part X

Macroprudential Authority

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Part XI

Financial System Oversight Committee

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Part XII

Information Exchange with Financial Sector Authorities

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Part XIII

Statistics and Information

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Part XIV

Relationship with the Parliament, the Government and the Public

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Part XV

Credit Operations

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Part XVI

Financial Provisions

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Part XVII

Internal and External Audits

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Part XVIII

General Provisions

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Part XIX

Repeals and Savings

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