always concern about the balance between politics and economics. in my view for much of our post independent years – i ’ m not putting this on one party or the other party, or one government or the other – but if you look back from 1948, for most of the time, politics has trumped economics. it is our job to convince our politicians that good economics is good politics. we need to, as a central bank, to get away from this cycle of stop – go policies, of creating artificial booms through misaligned policies. we need to set a good framework, as i said, for the economy. we have a representative democracy. the people elected by the people – the government – of course have sovereignty reposed in them. however, the monetary law act sets about some very specific responsibilities for the central bank. and it is up to us to fulfill those responsibilities in a very technocratic, objective and free way. that is not to say that we should be criticizing the government of the day. that is not our business. but there are channels through which we can give independent advice to the government discretely. i am very keen and i have spoken to our leaders too about this, that the central bank does its work independently and in a technical way and discretely advices the government about what we think is the best way forward for those segments of policy and practice for which the central bank has responsibility. so, i need your cooperation. thank you, thank you very much. bis central bankers ’ speeches

of the then prevailing exchange rate system and the crawling band regime to sustain themselves. immediately after the float, the market experienced some volatility as is usually expected. however, this volatility has been contained overall since then. this, not only brought confidence to the market, as evidenced by increased foreign exchange inflows, but also allowed greater flexibility and market opportunities to foreign exchange dealers of commercial banks. subsequent to the float, the central bank became a net buyer of foreign exchange from the market, in sharp contrast to its experience in the period prior to that. our objective with regard to the foreign exchange market is to ensure an orderly adjustment of the exchange rate, without excessive volatility. such adjustment should reflect the emerging economic fundamentals of the country. we should ensure that demand and supply mismatches are addressed on time so that there is no excessive volatility in the exchange rate. turning to the theme of this year ’ s conference, i. e. “ is it time for a common currency in the saarc region? ”, i believe that it would give rise to much interesting and thought provoking discussion and debate. we know that the saarc was established in 1985, with the objective to provide a platform for the peoples of south asia to work together in a spirit of solidarity, trust and understanding. it aims at accelerating the process of economic and social development of member countries. i believe the considerations of the timeliness to introduce a common currency for the region will be supportive towards the objectives and aims of saarc as well. while taking note that deliberations such as these would definitely lay the foundation for future developments in the saarc region, i take great pleasure in inaugurating this conference today and wish you all success with the conference. and i would also like to urge you to take a little time off to visit some places of interest, while you are in this beautiful country, sri lanka. thank you.