Dr. Ranee Jayamaha has announced her resignation from the Monetary Board and will not be a member of the new Governing Board of the Central bank of Sri Lanka (CBSL).

The new board is expected to be constituted by President and Minister of Finance Ranil Wickremesinghe in the coming days under the new Central Bank Act.

This was revealed by Monetary Board member Sanjeewa Jayawardena, PC to the Supreme Court during the preceding week in the two Fundamental Rights applications bearing numbers SC FR 195/2022 and SC FR 212/2022, seeking accountability from the Rajapaksas and other leading bureaucrats of the former regime for the current economic crisis.

When The Sunday Morning Business reached out to a high-level source from the CBSL, they refused to confirm Dr. Jayamaha’s resignation, but confirmed that changes would be made to the newly-constituted board.

Under the new Central Bank Act No.16 of 2023, which was drafted with the collaboration of the International Monetary Fund (IMF) to ensure the independence of the CBSL, the new Governing Board will consist of seven members including the Governor and six other persons who will be experts in the fields of economics, banking, finance, accounting and auditing, law, or risk management. 

This new governing body will be charged with the responsibility of overseeing the administration and management of the affairs of the CBSL and the determination of general policy of the Central Bank other than the monetary policy.

Furthermore, a new Monetary Policy Board has been established, which is expected to meet at least once in two months and will be charged with the formulation of monetary policy of the CBSL and the implementation of a flexible exchange rate regime in line with the flexible inflation targeting framework in order to achieve and maintain domestic price stability.

The Monetary Policy Board will consist of the members of the Governing Board, two experts in economics, the CBSL Deputy Governor in charge of price stability, and the CBSL Deputy Governor in charge of financial system stability.

Most importantly, as part of the intention of the new Central Bank Act to prevent fiscal dominance over the monetary authority, the Secretary of the Ministry of Finance will not be a member of either the Governing Board or the Monetary Policy Board.