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ECONOMYNEXT – The senior management of the central bank decided to review a steep salary hike made after a currency crisis, a statement said amid legislative and public anger against the move.
The salary hike was initially defended on the basis of central bank independence.
Giving salary hike to offset the inflation created by the agency in the process of enforcing rate cuts by printing money has been a longstanding practice.
However legislators said the independence was only given to the agency to print money (and trigger inflation or currency depreciation) and it did not apply to salaries.
Under a new law the agency has got powers to trigger up to 7 percent inflation a year with no questions asked. Since September 2022, the agency has created lower levels of inflation and has appreciated the currency with deflationary policy.
“In response to this situation, a majority of the senior management and professionals of CBSL made a collective decision to consider a revision to their salaries,” the statement said.
“This decision was communicated to the Committee on Public Finance (COPF) on 16th March 2024, prior to and independent of the recommendations made by COPF.”
The COPF had recommended that the salary hike be suspended and an independent committee decide the remuneration.
It was revealed that after the salary hike, an office assistant was paid 186,000 rupees at the central bank.
The full statement is reproduced below:
CBSL senior management to revisit recent salary revision
The recent salary revision for the period 2024-2026 made by the Central Bank of Sri Lanka (CBSL), post the collective agreement between the Governing Board and the employee representatives, created much discourse among the public.
In response to this situation, a majority of the senior management and professionals of CBSL made a collective decision to consider a revision to their salaries. This decision was communicated to the Committee on Public Finance (COPF) on 16th March 2024, prior to and independent of the recommendations made by COPF.
The COPF Chairman has meantime recommended that the collective agreement to increase salaries of CBSL staff be reviewed by an independent committee, entailing revisions across all employee categories of CBSL.
The CBSL, as the apex financial institution in the country, functions autonomously using the powers vested to it, previously under the Monetary Law Act, No. 58 of 1949 and now under the CBSL Act, No. 16 of 2023.
The CBSL is held accountable in achieving and maintaining domestic price stability and securing stability of the country’s financial system.
To achieve this critical National mandate, the CBSL employs many experienced and professional staff under its wing and the recent salary revision was made with the intention to retain its experienced staff in order to function at its full capacity.
