SL has no need of crisis budget, says ex-IMF official

As Sri Lanka is roughly a month away from presenting its budget for 2022, a former International Monetary Fund (IMF) official said it doesn’t have to be a crisis programme, instead it should focus on growth, with a medium-term path towards fiscal deficit reduction and debt sustainability, with provisions for taking care of the vulnerable sections of society.

SL’s homegrown debt repayment plan may keep investors away: HSBC, Citi

As the Sri Lankan government continues to resort to short-term ad hoc arrangements to service the country’s external debt obligations, two leading international investment banks warn that the lack of clarity on the debt sustainability front could keep both foreign and domestic investors at bay further worsening the country’s already weak external position.

Public debt surges by Rs.1.6tn in first seven months as pandemic batters state revenues

The outstanding debt of the Central government rose sharply in the first seven months of 2021, with the domestic financing increasing the most, as the budget deficit expanded to large proportions when the pandemic knocked the state revenues off course since April this year, when the restrictions returned.

NCE slams CB for placing all exporters in one basket

Sri Lankan exporters yesterday slammed the Central Bank for unjustly placing all exporters in one basket when the latter charged that exporters are not fully repatriating and converting their proceeds within a reasonable timeframe.

Govt. to draft new laws to attract investments in digital currency sphere

Sri Lanka plans to draft acts, rules and regulations required to attract investments into digital banking and blockchain technology and to facilitate cryptocurrency mining companies to invest in Sri Lanka.

Organic farming could help fetch premium prices

While underscoring the need to help farmers make a gradual shift towards organic fertilizer usage from chemical fertilizers to overcome the short-term difficulties confronted during the transition, the Export Development Board (EDB) Chairman Suresh de Mel recently defended the government’s organic fertilizer policy as such could help Lankan agri exporters to make inroads into premium markets.

CB issues impairment guidelines for banks

The Central Bank has issued guidelines on how the banks should approach when dealing with loan impairments, effective from next year, when they come out of the latest round of moratoria, as there could still be a section of borrowers whose cash flows would be under pressure, even after the removal of economic restrictions.

Govt. and CB eye US$ 10bn fresh inflows over next six months

The government and Central Bank (CB) expect nearly US$10 billion in fresh foreign exchange outflows over the next six months to build the country’s foreign reserves to a comfortable level.

CB unveils six -month plan to stabilise economy

Amid a foreign exchange and a looming external debt crisis, Central Bank Governor Ajith Nivard Cabraal yesterday unveiled the much-awaited ‘The Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability’, with an aim to usher in greater stability to the economy, backed by stable prices and sound macroeconomic fundamentals.

Govt. urged to come to senses on fertilizer ban

The government will have to come to its senses with regard the ban on chemical fertilizers as the current decision is more detrimental to the economy than the supposed negative implications arising from the usage of such fertilizers, Sri Lanka’s planters said.

Life insurance drives overall industry growth in first half

Sri Lanka’s insurance industry did well through the first six months in 2021 (1H21), led by the life insurance sector, continuing the momentum it gained in 2020, when the pandemic and its resulting health and monetary policy conditions augured favourably with the industry.

Govt. indicates safe re-opening of country remains priority

Safe re-opening of the economy from lockdowns is imperative for Sri Lanka to push through its recovery after the country was emerging out of the pandemic induced recession in 2020 which left large slacks in many areas and sectors, awaiting to be regained and recovered to their full capacities, according to new Central Bank Governor Ajith Nivard Cabraal.

Central Bank to directly fund oil imports for next 3 months

The Central Bank (CB) plans to directly finance the country’s petroleum import bill for the next three months with its reserves, amid concerns of fuel shortages that may occur due to scarcity of dollars in the country.

Inflation could breach CB’s upper limit, warns ICRA Lanka

The current trajectory of the consumer inflation is likely to go past the medium-term inflation target of the Central Bank, forcing it to lean towards its hawkish stance, which it set off in August to stem any more likely pressures on prices, according to ICRA Lanka Limited.

CEB engineers fear the worst if govt. moves ahead with New Fortress deal

Sri Lanka stands to lose up to US$ 400 million over the next five-year period if the government decides to move ahead with the unsolicited proposal submitted by the US-based New Fortress Energy (NFE),

Export earnings top billion dollars for third consecutive month in August

Sri Lanka’s merchandise export earnings topped a billion dollars for the third consecutive month in August, with almost all the major export categories performing well despite the pandemic-induced restrictions, the Export Development Board (EDB) said in a statement.

Worker remittances fall for third consecutive month in August

Remittance income from Sri Lankan migrant workers slumped for the third consecutive month in August, extending the year-on-year decline set off in June this year, a trend which is partly associated with the levelling off of the pace of growth continued for little over a year, and the re-emergence of grey market operations.

Pandemic provides room for bold economic reforms

Reminding the famous saying that one must never waste a good crisis, a leading economist in the country opined that there has never been a better time for Sri Lanka to make the pressing and long overdue reforms in its economy through tough revenue and expenditure reforms.

Cabraal to soon unveil new economic stability road map

The newly-appointed Central Bank (CB) Governor Ajith Nivard Cabraal this week announced plans to unveil a fresh economic stability road map shortly, prioritising stability, including plans to pull back on money printing, with a view to rebuild confidence on the economy among the key stakeholders and market participants.

Recovery in August reserves fails to impress Moody’s

Moody’s Investors Service yesterday said Sri Lanka’s external reserves remain still low even after taking receipts of inflows of around a billion dollars in the last couple of weeks, which helped the country to recoup part of the lost assets caused by the settlement of a billion dollar sovereign bond and other liabilities through August.

Weak sovereign rating, pandemic continue to pressure Lankan banks

Sri Lanka’s banks’ credit ratings are continued to be pressured by the challenging operating environment stemming from the weak sovereign credit profile and the lingering effects of the pandemic and its toll on the broader economy, according to Fitch Ratings.

Economists call for extensive review of tax system to improve revenue mobilisation

An improvement in Sri Lanka’s revenue mobilisation effort requires an urgent and extensive review of the tax system, to ensure the government can meet its expenditure commitments, while the country is in the midst of one of the worst macroeconomic crises in its history, economists said.

July trade deficit expands on surging imports; exports recover

Sri Lanka’s trade deficit continued to expand in July 2021 from a year ago levels, as imports surged surpassing the increase in exports, amid the rise in global commodity prices and higher imported volumes.

Data shows signs of front-loading of certain import goods up to July

There were signs of excessive imports of certain categories up to July this year, reflecting front-loading by a section of traders, a claim, which was repeatedly made by the Central Bank, while partly attributing it to the current undue pressure on the dollar-rupee exchange rate.

CB Governor Lakshman to step down on Sept. 14

Central Bank Governor Prof. W.D. Lakshman yesterday formally announced that he is stepping down from the post prematurely, with effect from the 14th of this month.

Grip on imports further tightened to mitigate pressure on currency

Amid a slew of measures taken in the recent past to alleviate the pressure on the currency, the Monetary Board of the Central Bank this week decided to further limit importation of some 623 products under 11 categories, which are deemed “non-essential /non urgent,” unless such imports are covered by 100 percent cash margin.

No lockdown travel restrictions for tourists

Quoting a health communiqué issued by Director General of Health Services Dr. Asela Gunawardena, on September 3, the Sri Lanka Tourism Promotion Bureau (SLTPB) yesterday in a statement said the prevailing lockdown and travel restriction rules would not apply to international tourists visiting Sri Lanka.

CB asks banks not to quote above Rs.200 when buying dollars

The Central Bank has written to banks asking them not to quote outside Rs.200/Rs.203 level for US dollars on all foreign exchange transactions as banks were quoting Rs.238 for a dollar by Monday amid exporters continuing to withhold selling dollars in the domestic market to book massive conversion profits hoping that the rupee would further shed value.

Govt. says no to addition of any new coal-fired power plants

The government has ruled out any coal-based capacity additions or new coal-fired power plants as it reaffirms on the target set for the country’s power sector to achieve carbon neutrality in 2050 while meeting 70 percent of the country’s power generation through renewable energy sources by 2030.

Lending rates respond to policy rate hike as Average Weighted Prime Lending Rate crosses 6%

Market lending rates have began responding to the policy rate and banks’ reserves ratio hikes announced on August 19, as prime customers witness their loans becoming pricier for the third straight week as the benchmark rate climbed above 6.0 percent last week.