Sri Lanka names new Central Bank chief to help crisis turnaround

Colombo, April 5 (Bloomberg) – P. Nandalal Weerasinghe, a career central banker, was appointed to head Sri Lanka’s monetary authority as the government seeks to pull the South Asian nation out of an economic tailspin, avoid a bond default and start aid talks with the International Monetary Fund.

Currently a deputy governor after a stint with the IMF, Weerasinghe expects to take over as governor of the Central Bank of Sri Lanka on April 7, he said by phone from Australia. He will be replacing Ajith Nivard Cabraal who resigned Monday after failing to check a spiraling economic crisis and resisting aid from the multilateral lender.

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“Yes, I have been approached and offered the post,” Weerasinghe said on the appointment, which was confirmed by a central bank spokeswoman. “I have agreed to accept it,” he said.

Weerasinghe takes the job with inflation running at its fastest pace in Asia and the rupee the world’s worst-performing currency this year. His first job would be to review interest rates, a decision that was originally due Tuesday but deferred indefinitely as President Gotabaya Rajapaksa overhauled his political and economic teams.

READ: IMF says monitoring political and economic developments in Sri Lanka ‘very closely’

The main cause of Sri Lanka’s almost 19% inflation may be beyond Weerasinghe’s control. Dwindling foreign exchanges reserves led to a shortage of food, fuel and medicines, brewing discontent in the island nation, while massive debt payments loomed. The problems were compounded by Russia’s invasion of Ukraine, which pushed up oil prices and strangled a recovery in tourism.

With a doctorate in economics from the Australian National University, Weerasinghe previously served as an alternative executive director at the IMF until 2011 and as the central bank’s chief economist, according to the authority’s website. He had chaired the CBSL’s monetary policy committee and foreign reserve management committee.

On Monday, President Rajapaksa also swore in Ali Sabry as the new finance minister, replacing his brother Basil, to steer the economy out of its worst crisis in decades. Sabry is part of a team that will oversee the nation’s debt restructure, key to obtaining support from the IMF.