w a wijewardena : central bank – why “ economic and price stability ”? speech by mr w a wijewardena, deputy governor of the central bank of sri lanka, at the association of professional bankers, colombo, 23 march 2007. * * * an amendment effected to the monetary law act in 2002 requires the central bank of sri lanka to pursue “ economic and price stability ” as one of the two core objectives of the bank. this is somewhat a departure from the central banks in the rest of the world which have been mandated to attain only “ price stability ”. hence, it may be puzzling to many whether the central bank of sri lanka has been given an additional objective to attain. it is, therefore, timely to identify the precise meaning of this phrase “ economic and price stability ” in the context of a central bank. the amendment to the monetary law came as a part of the modernization program which the bank commenced in 2000. one of the essential ingredients of that program was to update the monetary law to be on par with the emerging global best practices. up to that time, the central bank had been entrusted with a multitude of objectives : attaining price stability, participating in economic development, preserving the external value of rupee, protecting banks from collapse and maintaining the financial system stability etc. these objectives were not very clear and were often in conflict with each other. they also posed difficulties in monitoring the progress or assessing the success. many critiques had pointed out, and the technical staff in the bank had experienced, that the bank could not succeed in its main task of taming inflation and bringing about price stability, if it was saddled with other tasks that would go against its main objective. hence, there emerged a general consensus that the central bank should do only what it can do effectively and not otherwise. that consensus required the central bank to pursue a single objective, viz., the attainment of price stability. following this consensus that emerged through the consultative process involved in the modernization, the technical staff of the bank proposed an amendment to the monetary law by mandating the bank with the task of attaining two core objectives. they were the attainment of both “ price stability ” and “ financial system stability ”. when the draft law was submitted to the then governor, mr. a. s jayawardena, for clearance, he had changed the “ price stability ” to “ economic and price stability ”. the puzzled and bewildered technical staff flocked into his room seeking a

fehmi mehmeti : the financial sector is liquid and supports the economy in kosovo speech by mr fehmi mehmeti, governor of the central bank of the republic of kosovo, at the conference with the head of the imf mission for kosovo, mr gabriel di bella, pristina, 4 november 2022. * * * dear di bella - head of the imf mission for kosovo dear media first of all, allow me to thank the international monetary fund for the continuous support it has provided to kosovo, and in particular to the central bank of the republic of kosovo, in carrying out its duties in maintaining and preserving a stable and continuously growing financial system. during the meetings held with representatives of the international monetary fund, we informed them about the latest developments and data of the financial system in kosovo. the financial system in kosovo has continued to be liquid and well capitalized, where double - digit growth has been recorded in all indicators being one of the important factors in the economic growth and development of the country. in total, the means of the financial system in the country, on 31 august, 2022, have reached the total value of 9. 3 billion euros, with an annual increase of 10 percent. in the meantime, the means of the banking sector have continued the growth trend even during 2022, reaching the value of around 6. 4 billion euros in august 2022, which represents an annual increase of 11. 1 percent. in august 2022, the total value of deposits is worth 5. 2 billion euros, which represents an annual increase of 11. 8 percent, while the growth of deposits continued during the month of september, with a rate of 12. 7 percent. the banking sector continues to be stable, increasing lending activity and playing a very important role in crediting the country's economy during this year as well. the value of the credit portfolio of the banking sector at the end of august 2022 was in the amount of 4. 2 billion euros, with an annual increase of 18. 6 percent, while the average loan interest rate was 6. 0 percent. non - performing loans have continued with the downward trend and today the rate of non - performing loans is at the level of 2. 1 %, which is a significantly better indicator compared to countries in the region or even beyond. the banking sector continues to be well capitalized and liquid. the capital adequacy indicator for the banking sector stands at 16. 1 percent, which is significantly above