Dhananath Fernando  00:03
Dr. Chandranathamar Segar, welcome to Advocata Studio. Thank you very much for joining the conversation today.

Speaker 1  00:08
Thank you very much for inviting. It's a pleasure to be here.

Dhananath Fernando  00:11
Thank you. So, Dr. Chandranathamar Sekar is the Assistant Governor of the Central Bank of Sri Lanka, and he has done a lot of work on economic recovery, and he has represented the Central Bank of Sri Lanka in the IMF as well. And he have done many assignments, leading many departments at the Central Bank. If you have been referring most of the Central Bank reports, which was produced by the Economic Research Division, and that was the work by the team at the central bank led by Dr. Amra Sekara, and most of the media, journalists, academics, researchers, research institutes like us depend on the data that has been compiled by his team. We are very grateful. Thank you very much. Just to get things started, what is I think people's question is what is the status of the economy? And if you go to any conversation conference, they ask like, is it stable or do we have to worry about anything, or can we celebrate, or do we have to be cautious from the point of view of the central bank, can you give us a status update on what's the status of the economy?

Speaker 1  01:26
Absolutely, Laranad. So we are recovering from a very very deep crisis, and in 2022 we recorded a contraction of 7.3 percent in real terms in the economy, and in 23 the contraction was 2.3% By but by the second half of 2023 we started. I mean the economy started recovering, and inflation, as you know, shot up to 70% in September 2022. But within 10 months of that peak, we were able to bring it down to single digits. So by July 2023, it was back to inflation was back to single digits, and at the moment we are going through a temporary period of deflation. We believe that next month also inflation will come back, and by the second quarter of next year, we'll get back to the target inflation target of 5% Usually, deflation is a concern because that could affect growth, but in Sri Lanka, that is not the case because we have seen growth At 5% in 2024, and even in the first couple of quarters in 2025, growth seems to be quite good. So we think that growth this year could be between four to 5% Inflation is under control, and the balance of payment conditions are also much better than where they were two years ago. We had no usable reserves at the peak of the crisis, but now our reserves are above 6 billion US dollars, and the exchange rate it depreciated sharply in 2022, but since then, it has appreciated by 12% in 23, by about 11% in 24, and there is a mild depreciation of about 2.5% thus far this year. If you look at the other sectors of the economy, for example, fiscal sector, we see improvements. The budget deficit is down. There is a primary surplus compared to a very large primary deficit a couple of years ago. Revenues are up. Revenues were at very low levels in 2020, 2021, 2022. They were one of the lowest. Sri Lanka's revenue to GDP ratio was one of the lowest in the world. We were in the bottom 10. We were the there were only about eight or nine countries below us in terms of average revenue, government revenue to GDP ratios. If you look at the world statistics, But now revenue is up to 13.5% of GDP that was in 24, and we expect revenue to increase to 15% by this year. And so, I mean, we are doing well. We are doing well. The economy is stable compared to where we were, but are we out of the woods? Not really. No, there is a lot to be done. So, if you look at, if you think of the economy, if you think of economic growth, I think we need to maintain the momentum. There's a lot to be done. We are under an IMF programme, but it's not enough if the if the the country is to grow in the next several years at a at a reasonable rate, and there cannot be we cannot go back to the past. So so there cannot be policy reversals, and that is we are confident about what's going on in the economy at the moment. But there is a lot of challenges. So globally, there are so many uncertainties, as you know. But domestically also, we have to we also have to tread very, very carefully. That's where we are.

Dhananath Fernando  05:43
So, Doctor, from what I gathered, so econo, but from if I understood what you said right, the economy, what you say is economy is stable. But if we were to worry about something, is it the growth that do we have to worry about? And making sure that we are not reversing some of the policies is what we have to keep a eye on. So, if for an example, if a business person wants to know whether we are on the right track, if he want, if he sees that economy is growing, and if we are not reversing some of the policies, is it an indication that we are slowly, we are still not out of the woods? But at least, is it a way to think that we are in the right direction, or do they have to think about any other indicators like maybe the inflation or the reserve level or the exchange rate, or how do you, for a someone who really do not have a in-depth understanding of the economy, what do they have to think about or to make sure that okay, it's in the right direction?

Speaker 1  06:40
I think you summarised it very well, Dananath. So the economy is recovering; it is stable, but there cannot be policy reversals. We do not have that benefit. We may have had that benefit in the past, but but not anymore. Not anymore. Growth is always a concern. I mean, it has been a historical concern because in the past, what we have done is that we've provided to the economy temporary, short-term monetary and fiscal stimulus. But of course, I mean, those. I mean, that kind of stimulus cannot drive long-term growth. So we need long-term growth strategy, and of course, we see elements of that. For example, addressing corruption vulnerabilities that would definitely address growth, and also, I mean that would improve the doing business environment in Sri Lanka, but at the same time the population is ageing, and there are so many global challenges, as I said before as well. So we need to be very very careful in with regard to our growth strategy, and the government in particular will have to address those concerns going forward.

Dhananath Fernando  08:03
Thank you, Dr. Maru Sekerar. Now let's come to the IMF programme, the 17th IMF programme. How are? What is the progress? What we heard on news and on media was Dr. Geeta Gopinath visited Sri Lanka, and it seems that they are taking Sri Lanka sort of as a success story on the incredible incredible recovery that we have gone through, what is the actual status? And if you, I'm, I'm, what VCs every six months there's a review and there are recommendations being given. There's a report being released, and they say what has been done, what hasn't been done, and sometimes there are delays to get the director level approval. Those are the little things that an outsider would see. But in real terms, how far have we moved forward, and are there any risk factors that we may derail from the IMF programme or anything that citizens should know about the IMF programme.

Speaker 1  09:07
Sure. So I think as Sri Lankans, we should be proud that the the IMF programme is working very well. So essentially, I think there was a lot of sceptics at the beginning, and of course, I mean, sceptics would would be there always. Always, but but I don't think anyone thought that Sri Lanka would come to this stage. I mean, would Sri Lanka would recover this fast from that deep crisis I was we were talking about at the at the beginning. The IMF programme was approved in in March 2023 by the IMF Executive Board. The initial letter to the IMF seeking a financing facility went. The fund in March 2022, and Governor, the current Governor Dr. Nandra Virasingha came to the to the fund in April 2022 and started negotiations. And the I mean these are these are $3 billion facility, and as you said, there are eight reviews and nine disbursements. A disbursement at the beginning, and thus far we have completed four reviews. So essentially, what what is meant by a review is that there are targets set agreed at the beginning of each year. I mean, at at each review. I mean, we agree on targets for a couple of reviews, and then the IMF staff they come here. They monitor the progress of those targets. Our progress against those targets, and of course, I mean this monitoring happens on a on a day to day basis as well. And from our side, also we monitor our progress on a on a day to day basis, and then we try to achieve those targets. And there are several structural benchmarks also set, and at each review, this progress is reported to the IMF Executive Board by the staff of the IMF. So initially, there is what is called a staff level agreement, and from there onwards, I mean, if by any chance there are, you know, a few things that are remaining to be done, they will be called prior actions, and once the prior actions are met, our case will be taken to the IMF board, and they can either approve or not approve. And once the approval is given, the the disbursement is done. So thus far, out of the 3 billion US dollars. We have got about 1.7 5 billion US dollars. Four reviews are completed. Four reviews to to go. So, in other words, we are right in the middle of the IMF programme, and this will this supposed to be this is supposed to continue till, if I'm not mistaken, March 2027,

Dhananath Fernando  12:22
so I'll take the side of the sceptics or the critics for or play the role of the devil's advocate for for a second. Now, one main criticism or concern that people always raise is okay, this IMF programme they put the conditions, and there's no negotiation power at all for the Sri Lankans and generally it's the Minister of Finance, the Treasury Secretary, and the Central Bank basically participate in these negotiations and conversations. I think there's no one better than you to ask this question because you have been in both sides. You have represented the IMF, so as the Central Bank of Sri Lanka, actually, can you explain how does it how does it happen? Actually, do they come with a cane and say like you know, do this, or how does this negotiation process happen? Actually, do they listen to us, or whether it is like just we are just doing what they are saying?

Speaker 1  13:17
Thank you, Daranat. That's my favourite question. So essentially, the IMF comprises of more than 190 member countries. We are also one member country. Think of it as a global bank. It's it's actually a the the global lender of last resort. We call it the global lender of last resort. When no one else is lending to us, when no one else is lending to a particular country, this is where they have to go. So it's a given. There are some other options as well, but not they are not as popular as going to the IMF, so think of it as walking into a bank and asking for a loan. There will be conditions that cannot be that cannot be avoided, but think of the conditions that that they are imposing. If you look at the Sri Lankan programme, they told us reduce inflation. They told us increase government revenues. They told us reduce the budget deficit. They told us build up international reserves. They told us streamline your social safety net programme. They told us introduce formula based monthly fuel adjustments. They told us do electricity tariff revisions regularly. They told us introduce the anti-corruption act. They told us. Stop printing money and make the central bank independent. They told us introduce a public financial management act. They told us introduce banking act amendments so that the the banking sector will be strengthened. So when you listen to this list, only then you realise that these are the things that we should have done, but we did not do. So unfortunately, during the crisis, we lost our credibility totally, and somebody else from out out of Sri Lanka had to come and tell us, ask us to do this, and that was the sad situation we were in. And these are actually commonsensical reforms that that we should have done. I'll take just a couple of examples: formula-based fuel price adjustments globally. I mean, we are we are a petroleum importing country, and how can a government or a politician decide on domestic prices on petroleum when we are totally dependent on imported fuel. So obviously, domestic fuel prices will have to be in line with with global prices. And if that's not happening, then either the relevant state-owned enterprises will make losses, or the that will be that will either be passed on to the government or the banking sector. Same with the credit price revisions. So from 2014 to 2022, if I'm not mistaken, we haven't changed our electricity prices even by a cent. We are dependent on imported fuel, whether it's oil, coal, or anything else, or and and also we are dependent on rainfall, on generating electricity. How can a country not change electricity tariffs domestically for eight years when all those things, all those changes are happening around the world and and and and in Sri Lanka? So that's why I said those are commonsensical reforms. We should have done those. We did not do those, and ultimately we had to listen to the IMF. And you were talking about the cane, but

Dhananath Fernando  17:27
yeah. Also, just want to understand now. With the IMF, there was a generally there's a staff level agreement. At the same time, we did a report called a governance diagnostic report. And if I remember right, there was about 100 odd recommendations. I think they have about 16 to 17 priority recommendations. So, what is the combination or connection of the IMF agreement and the governance diagnostic report? Do we have to do all what we what is recommended at the governance diagnostic report, or whether it is like optional, or whether the tranches are being, or at the review, this governance diagnostic report is also considered, or is it like a report that with a list of recommendations that whether you can do it or whether you can avoid it or like it's whether you do it the way that you want, or whether are there certain conditions being taken from the governance report to the IMF like the staff report, can you can you connect the two? How what is the what is the role of these two reports, or is it is it a one report that we don't see it as as like whether we see it as two reports?

Speaker 1  18:32
Of course. So in Sri Lanka, I think the the IMF recognised corruption vulnerabilities and governance issues as macrocritical. Not only the IMF, I think many within the within the country as well as outside they would consider Sri Lanka's corruption vulnerabilities and governance issues as macrocritical. I mean, it affects the performance of the macroeconomy. So the Sri Lankan government at that time they invited the IMF to carry out a governance diagnostic exercise for Sri Lanka, and that was that was carried out. And as you said, they came up with 16 priority recommendations, and that report is published. That was one of the conditions of the IMF programme. That report was published, and the recommendations of the report are now being implemented. For example, operationalization of the anti-corruption commission from time to time when we try to reach the staff level agreements. We agree with the IMF to incorporate some of those recommendations into the the the programme as structural benchmarks, and that's what's what's going

Dhananath Fernando  19:54
on. Got it. Also, in terms of now that these 3 billion, approximately about three. Billion dollars of IMF fund facility. Could you also indicate what is the time period that we have to pay it back, and are there any interest that we have to pay? Like, how does it work? And is the interest rate varies from country to country? In that case, like under what conditions that it would change? Could you give some indication on that as well, please?

Speaker 1  20:23
Sure. So I mean, the the IMF lending is based on something called the quota. So each country has a quota that they could they could access, and Sri Lanka's programme is based on the Sri Lankan quota, and we have borrowed for this programme 395% of the quota. So it's not exceptional financing, but when the amount outstanding that a country has borrowed from the IMF increases, then of course the interest rate will will increase. The this is linked to the global interest rates, and yeah, it changes from from time to time. And but I think what we have to understand is that whether it's borrowing from the IMF, World Bank, or Asian Development Bank, these are these. do not happen at commercial rates. They are more concessional than if you borrow. Yes, if you borrow from the commercial market.

Dhananath Fernando  21:32
Got it. And now, in terms of the commitments, Dr. Amracekara what is what is pending? Of course, generally there's a list comes out, and what we see is also it sometimes depending on the progress you adjust it, you push it maybe for the next term, or there are changes being taken place. But are there anything that is like non-negotiable that you really have to do it on this particular you know, time frame, and or is it like there are two tracks where there are certain things that you non-negotiable, and there are certain things that you can always negotiate. How does the conditions work? And in terms of what we assume is that since we have now in the middle of the programme, we have met the conditions, and IMF basically do a statement on our progress. Do you worry on I mean the future some of the commitments whether how hard it is or whether it is becoming if the programme is becoming harder and harder towards the latter part and also there was a conversation that we haven't really completed some of the IMF programmes. How do you bring all these together? Whether we will continue it or whether we will go out from it, or if it's controversial, don't answer. But how do you see it basically in terms of the conditions and our ability to continue with the programme?

Speaker 1  22:51
Of course, we are always worried. That's what central bank central bankers do. We worry about almost everything. The IMF programme, as I said before, is subject to eight reviews. So every six months, on average, we get a get an opportunity to look at the targets and the benchmarks, and agree and disagree with the IMF. And if the if changes need to happen, we can we can always negotiate. So that option is there every six months that those negotiations are happening. But there are few things that we cannot cannot change. For example, The primary surplus. So it was agreed at the very beginning that Sri Lanka has to generate primary surpluses of at least 2.3% of of GDP, and I don't think we need to negotiate on things like that, and an inflation target of around 5% within a certain band that has been agreed at the beginning. So that will that will continue, and so on. The so yeah, we we try to stick to the original programme, but if changes are needed, of course, I mean those can be can be done, and also I mean when you set you know new structural benchmarks or targets for for the next year for the next couple of reviews, then we look at what has what what actually has gone you know I mean right or wrong, and then we change course. There are there is space for adjustments like that. For example, I mean, we didn't expect growth to be this high in 2024 and this year. So when the IMF. First structured the programme. I think they had very low growth rates for Sri Lanka: 1.5% 2% and so on. But that's not what was realised. We had 5% growth last year, and so on. So, with those, of course, the the ratios will also change. I mean, higher growth would mean that the, for example, government revenue in terms of rupees billion compared to the revenue to GDP ratios that were agreed could be different. So those adjustments, of course, take place.

Dhananath Fernando  25:40
I want to quickly go back to a part of the previous question. Since you since you represented Sri Lanka at the IMF board, could you also give a quick overview of what's the role? Because I I remember there was one in a way a criticism for the current governor saying that okay you have represented the IMF, and now you are also being the governor of the central bank, and like you are supporting the IMF side sort of a sentiment. But I think it may be important that you clarify what is the role. I I mean, why a representative from Sri Lanka is be in the board of the IMF? What what is happening? Can you can you shed some light on the on the process and the protocol?

Speaker 1  26:22
So when you are the alternate executive director or the alternate executive director of the IMF, you represent your constituency. So even now, I mean, we've we've had the executive directors of the IMF visiting Sri Lanka. They actually represent us. I mean, we I I was on the board and I represented the interests of Sri Lanka. So current governor also did the did the same. mr. Mahesh also did the same. So the so we as alternate executive directors for Sri Lanka at the IMF represent Sri Lanka. It is. I mean, we we are the voice of Sri Lanka at the IMF IMF board, and it's all about common sense economics as well. So all of us. I mean, the the IMF staff and IMF executive board members, as well as many central banks, we've been to similar universities and we have similar backgrounds. So this is all about common sense economics, and of course, I mean serving on the IMF board also helps us to negotiate better with the IMF when whenever there is a IMF staff visit,

Dhananath Fernando  27:48
I just wanted to also understand. You can skip this question if you really cannot recollect the data. If I remember right, during the COVID time there was a conversation. Let's go to IMF. If I remember right, actually we requested, but IMF response was slow. Is I vaguely remember what I read, and even I have read even during at the height of the war that we reached out to IMF, but they were basically dragging their feet, and then India has to give a little bit of support for us to, I mean, connect with IMF. Is there any truth to it, or actually, what happened? Whether did we reach out, or whether it was like too rushed because with COVID, everyone was going to IMF, so there was like a you know line of countries who needs IMF support. Can you can you shed some light on what happened, especially during COVID time, but if you recall, also during at the height of the war, whether did we had to get India support? Because I remember, I think you were at the table at the very first time when we went to the IMF, like the negotiation. I think in Washington, and even people said like, why the Indian finance minister seated on the same table, could you also, you know, clarify the or the clear the dust on on these three issues?

Speaker 1  29:08
Sure, the IMF introduced some emergency financing facilities during COVID, and there was some interest. and And if you remember, Dananath, we were at an we were with the IMF under a programme just before COVID hit as well. That programme was discontinued. At the same time, there were some discussions on accessing this new these new facilities that the IMF introduced during COVID, but I can say this now: we were only involved in the technical discussions, but the the letters were sent and so on. But the discussions, I mean, once this IMF. Sort of view that Sri Lanka's debt was unsustainable was communicated to the Sri Lankan authorities at that time. That was the end of the negotiations discussions with the IMF. So the yeah, so I mean we had to wait for, I think almost two more years to access to write to the to the IMF asking for their assistance at the height of the crisis. India, India's role. So, India was extremely helpful. We should be very grateful to India because you start negotiations with the IMF. As I said, as we discussed at the very beginning, this was a very deep economic crisis. A lot happening in Sri Lanka as well. People were going through a really tough time, and we knew for a fact that the negotiations with the IMF will take quite a long time. What do you do till then? What do you do till the end of the negotiations? And how do we survive? I mean, no reserves, absolutely no usable reserves, and and people were in long queues and so on. So the the Indian government came to our rescue at that time, and they provided credit lines to Sri Lanka, so that we could survive until the IMF assistance actually came. That's that's exactly what happened. The role.

Dhananath Fernando  31:41
Thank you very much. With that, let's move one of the critical reforms that you even mentioned coming from with the IMF programme. That is the central bank and the independence of the central bank. I just want to understand first. I think there was a there were two boards which was recommended, and you have been at the central bank before the pre reforms and after reforms. How do you evaluate with your experience working with many other governors and with your colleagues around many other central banks, reserve banks? How do you see before reform, after reform?

Speaker 1  32:16
So the Montreal Act that was in place before the new Central Bank Act, that was a fantastic piece of legislation, and that, but that was drafted in late 1940s. The world has evolved quite a lot, and central banking had also evolved. So many changes were needed, and in particular, we felt that central bank independence was not enshrined in the act in the sense that, from person to person, how the Monetary Law Act would be implemented could be different. So, recognising this in 2018 19, we started drafting a new central bank act under Dr. Indrajit Kumaraswamy and Dr. Nandala Vir Singh was the senior deputy governor. He played a critical role in drafting, and that was drafted. the The bill was prepared; it was submitted to the Parliament in 2019. But nothing nothing happened, And with some more revisions, we actually implemented it in 2023. So I strongly, I strongly feel that if by any chance that new central bank act was there in 2019, if that was enacted in 2019, we wouldn't have faced the crisis that we faced in 2022, because so many things went wrong during that that period. During Dr. Kumaraswamy's time, there was a board decision that we should not finance the government that was reversed in 2020. We actually, when the initial requests were made to the to the central bank, so I strongly believe that if the Central Bank Act, the new Central Bank Act, was in place in 20 by the end of 2019, the crisis that we faced in 2020 2122 would have been milder. Of course, the the global shocks were there, but the policy errors, the the space for policy errors would have been would have been much lower. So, with the new Central Bank Act, so many things have changed. So, one key change is that there is no representation of the government on the central bank boards, so earlier in the Monetary Board under the Monetary Law Act, the Secretary to the Treasury was a member, and he could influence the monetary policy decisions. So the person who is responsible for fiscal policy of the country, the key official responsible for fiscal policy of the country, has a role in monetary policy decision making as well. That was not a global best practice, so that had to be changed, and also money printing. So there were provisions that enabled the central bank to print money at the request of the government. So with yeah, you can interpret it in different ways, but in reality, that possibility was there that had to be stopped, and under the new central bank act, that has been stopped, so there is no government representation on the central bank boards. Money printing is no longer valid, and inflation target targeting framework is set, and exchange rate is flexible, and so on. So, so many changes under the new Central Bank Act, and I believe that this is for the betterment of the of the country.

Dhananath Fernando  36:46
Could you also quickly comment on the independence versus accountability? This was a question that has been discussed multiple times, but since now we have been about one and a half years, two years under the new act. Two years. years. How do you feel in terms of comparing with accountability and independence? Do you feel since you have experience because you can only very few people can compare and contrast? How do you see the accountability aspect and the independent suspect pre versus post.

Speaker 1  37:23
Absolutely. So independence, central bank. I mean, if the central bank is expected to deliver on its mandates. So right now the mandate is the the core objective is ensuring price stability, and the secondary objective, the other objective, is to ensure financial system stability. If a central bank is to deliver on those mandates, independence has to be given to the central bank. So that's what happened under this this new act. But at the same time, I think there is a giving only independence will not work because institutions have to be responsible to to someone. In our case, to the general public and the parliament. So the the I mean we had to. So on the one hand, we had to sort of prevent fiscal dominance of monetary policy, but at the same time, we were made accountable to the to the public and the and the parliament, and the transparency provisions also helped in increasing or improving accountability. So essentially, if there are deviations from the inflation target, then we have to submit reports to the parliament and publish them as well. That provision was not there in the past. In the past, we would send confidential reports to the government. No one in Sri Lanka would know about those. No one in Sri Lanka would even know whether we have submitted those or not. So now the situation is different. We have to publish the monetary policy reports, which we are doing now. We have to publish reports on financial stability. We have to publish an annual economic review as well, and several provisions that ensure transparency, which would ensure accountability, and of course help us in maintaining our independence as well.

Dhananath Fernando  39:36
Also, now wanted to let's move to the monetary policy and inflation, which you have also been a part of for a long time. So, main question by any any conversation by the public, you are saying it's inflation is coming down or deflation. Why the prices doesn't reflect the inflation numbers? I'm sure you may have answered this multiple times at the central bank. Press conference.

Speaker 1  40:01
So, what's happening now, as I said before, is we are in a temporary period of deflation. When there is inflation, that does not mean that prices are coming down. That means that compared to the same period last year, prices have gone up. When there is inflation, when inflation is low, that means prices are going up, but going up at a slower rate. So it is a natural tendency for all prices to go up over over a period of time, so inflation is a natural phenomenon. So as I said before, we are in a temporary period of deflation, and during periods of deflation, actually, compared to a previous period a year ago, prices are coming down, so right now we see this deflation decelerating. So it was deflation of point 6% a month ago. Now it has come down to point 3% So we've come here from a very high level of inflation, 70% inflation in September 2022. So that meant that prices, compared to the previous year, went up in September 2022 by 70% So since then, inflation has decelerated, and we've come to a point where there is a mild reduction in prices. But when I say prices, it's an it's a basket of goods and services. It's not just one price of one good or one service. It's we are referring to it through a basket of goods and services, and inflation is measured by the Department of Census and Statistics through two consumption baskets. One is the Colombo Consumer Price Index, and the other one is the National Consumer Price Index, and we are seeing the National Consumer Price Index based inflation moving to positive territory in recent months, and we expect CCPI based inflation also to move to the positive territory in the next couple of months. But inflation does not mean that prices are coming down. It's the it's it's the the rate of increase in prices coming down. What is that is meant by inflation? But let me also now that we are talking about inflation, let's talk about a counterfactual as well.

Dhananath Fernando  43:02
Before that, Dr. Amarsikan, I think for our viewers, he mentioned something very important because most of the time when it was when the word inflation mentioned, everyone looks at the central bank, but actually the inflation is calculated by the Department of Census and Statistics. If you go to their website, the prices, weekly prices of vegetables, to most of the household daily consumables are measured. So when you say inflation, while through the monetary policy, which discussed that what's the role of the central bank on inflation, but actually these numbers are not calculated by the central bank, it was the Department of Census and Statistics. So, on the calculation, I will ask him. But it is mainly done by the Department of Census and Statistics. Sorry, I interrupted after your question. That's fine. Yeah, yes, you were speaking about a counter.

Speaker 1  43:54
Yes, counterfactual. Yes. So, in September 2022, as we discussed, inflation was at 70% but imagine a scenario where there was no central bank action, there was central bank inaction, or the central bank did not take measures to arrest this increase in inflation. So we would have moved to a hyperinflation episode. If by any chance that happened, so I mean, if by any chance that high level of inflation continued, or we were in a hyperinflation scenario, that would actually mean cost of living would con would have continued to go up massively, for example, when you look at the IMF data available with the World Economic Outlook, out of the 190 countries, I think if you take the period from 1980, to 2000 thus far, there have been. 60 countries with inflation rates of 50% for at least one year, and out of those, I think only 12 countries have been able to bring inflation down to single digits within one year. In most of the other.


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