Such payments services  4  BIS central bankers’ speeches  make the payments safer and faster. Payments are the circulation of money which is the life blood of the economy. Sixth, agent of the government This is the function that leads to a lot of criticism on the independence of the Central Bank. Six most important agency functions are the management of public debt, fiscal agent, official depository, financial adviser, management of Employees’ Provident Fund and Administration of Exchange Control Act. The most important agency function of the Central Bank is the financial/economic adviser to the Government. In this regard, as the Central Bank is responsible for the monetary policy in its entire scope and escalation. Conventionally central banks have had the responsibility to advise the Government on fiscal and other operations to the extent that they impinge on the economy and advise as to what should be the best course of policy action for the economy. Given the nature of the central banks’ functions, advance access to macroeconomic and financial information and their expertise, central banks are the closest economic advisers to the Government. The Central Bank statutorily submits a number of reports such as the Central Bank Annual Report as part of this advice. In addition, the Central Bank provides advice on various policy matters on an on-going basis to the Government. However, central banks world over are blamed for not providing constructive and impartial advice because of the independence issue. I will talk on central bank independence in a moment.
I would pray that you, after reading the Exter Report, may not complain that Central Bank has not done enough to Sri Lanka economy and economic welfare of the public in terms of the mandate given to it by the public. The Central Bank’s all powers and functions center around two objectives. Those are the securing of economic and price stability and financial system stability with a view to encouraging and promoting the development of the productive resources of Sri Lanka. This is not the forum for me to define technically each objective as there is no single accepted definition. However, those objectives in nutshell mean securing stability of the economy. Economic and price stability means the economy running on a sustainable growth path with a supportive low rate inflation. Financial system stability means financial institutions and markets operate without bubbles or contagious failures where the trust of the public in the financial system is maintained, stability of the Economy, prices and the financial system are inter-dependent. The stability of the Economy helps the public to make and keep their plans for the future which ultimately encourages and promotes development of productive resources of Sri Lanka. This is what will promote living standard of the public by increasing production, employment and real income. This is what the MLA has empowered the Central Bank to do. Thus, you may understand the enormous national interest entrusted to the Central Bank.