Sri Lanka brings back veteran central banker

Cabraal says he is not keen on an international bailout even as he has to resolve Sri Lanka’s depleted forex reserves.

Sri Lanka is turning to a veteran central banker as it seeks to bolster depleted foreign exchange reserves and service debt without seeking an international bailout. Ajith Nivard Cabraal, a former junior minister overseeing capital markets who led the Central Bank of Sri Lanka from 2006 until early 2015, will return as governor. Cabraal, who resigned from parliament earlier on Monday, confirmed his appointment in a phone interview. “I will be concentrating on stability first, then growth,” Cabraal said. The yield on Sri Lanka’s 2024 dollar bonds, which were up 43 basis points in the previous two sessions, fell about 4 basis points to 25.3% on Tuesday. During his previous governor term, Cabraal steered inflation to low single-digits and held down interest rates while foreign exchange reserves grew thanks to a resurgence in tourism and economic growth with the end of the island’s civil war.