In particular, if current drought conditions prevail, there could be adverse implications on price levels, while impacting on economic activities,  Central Bank of Sri Lanka – ROAD MAP 2017  Accordingly, it is anticipated that inflation expectations would broadly remain anchored in the medium-term with appropriate demand management policies, supported by timely supply side measures. 17  4. Financial Sector Policies for 2017 and Beyond The financial system remains important  from various internal and external  for efficient allocation of resources and  developments. hence in facilitating strong economic performance of the country. In particular, a broader, deeper and a liquid financial system is vital as economies grow more sophisticated. The Central Bank has sought to preserve the soundness, efficiency and stability of the financial system primarily through the regulation and supervision of all major categories of financial institutions,  A stable financial system creates a  ensuring sound and safe payment and  trusted, enabling environment  settlement systems as well as  favourable to savers and investors; helps  establishing risk management systems  the transmission of monetary policy;  and instilling good corporate  encourages efficient financial  governance standards and practices in  intermediation, which eventually  the financial sector while promoting  promotes investment and growth; and  financial inclusion. encourages effective and efficient operation of markets while improving the allocation of resources in the economy.
result in the reform of the Monetary  We are also mindful that while the overall development thrust is on track, there exists disparity in the incidence of poverty across the provinces and districts, despite the progress that has so far been made in reducing overall poverty in the country. Recognising the urgent need to pay attention to this, the  Law and Banking Acts, particularly to give greater powers to the Central Bank to regulate the financial system. We are confident that such moves would be instrumental in enhancing the credibility of the Central Bank, while preserving the independence it needs to perform its roles effectively. government has declared 2017 as the  Before concluding, let me express my  “Year of Alleviating Poverty” to  sincere gratitude to a number of people  eradicate poverty in all its forms from Sri  who are instrumental in supporting our  Lanka in line with the Sustainable  efforts to achieve economic and price  Development Goals (SDGs). stability and financial system stability as well as to deliver our agency and ancillary functions. I am grateful, to His  Central Bank of Sri Lanka – ROAD MAP 2017  34  Excellency the President Maithripala  excellent and highly professional advice.