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Sri Lanka central bank officials to be summoned to party leaders meeting over steep pay hike

A Sri Lankan parliamentary committee has called central bank officials to a meeting with party leaders due to controversy over significant salary increases they awarded themselves. This action follows criticism from legislators who are concerned about the central bank's financial management strategies, particularly its decision to print money and cut rates through inflationary operations, which has been linked to a severe depreciation of the Sri Lankan rupee from 200 to 360 against the US dollar in 2022. These policies have contributed to a financial crisis, marked by foreign exchange shortages and exchange controls, in a country that has historically struggled with monetary instability since moving away from a fixed exchange rate system in 1950. The central bank, established to manage the nation's currency, has faced criticism for its role in causing the rupee's decline and for a new monetary law backed by the IMF, which allows for up to 7% inflation to support growth. Additionally, there's criticism towards the state's efforts to limit the public's use of foreign currencies as a means to avoid the depreciating local currency.

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