The Central Bank (CB) said expeditious and transparent revision of energy sector tariffs should be a priority to boost the financial position of energy-related state owned entities.
In its latest monetary policy stance issued last week, the financial sector regulator said a cost based tariff structure is vital to minimise losses of state-owned entities. It said that energy sector tariffs revision should be a priority while improving the efficiency of social welfare programs to support the vulnerable groups of society impacted by the unprecedented economic crisis.
The bank said urgent measures are needed to restore greater political stability through consensus governance and social harmony to prevent further deterioration of economic conditions and complement the efforts of the Central Bank implemented thus far.
Swift policy actions are needed to strengthen the fiscal performance that would help avoid excessive reliance on monetary financing and maintain fiscal sustainability over the medium term, the CB communiqué stated.
The International Monetary Fund (IMF) has been insisting on improving the efficiency of SOEs to be financially stable and support the economy.
Technical discussions with the IMF on a loan program will come to a close this week according to IMF spokesman Gerry Rice.
Central Bank Governor Dr. Nandalal Weerasinghe said he was hopeful of reaching an agreement with the IMF for a support program within the next three months.
The country has to service a mammoth foreign debt of around USD 51 billion in the immediate years ahead while left with around USD 1.8 in foreign reserves as at the end of last month.