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Central Bank maintains policy interest rates at their current levels

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By: Staff Writer

January 23, Colombo (LNW): The Monetary Policy Board of the Central Bank of Sri Lanka, at its meeting held on 22 January 2024, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 9.00 per cent and 10.00 per cent, respectively.

The Board arrived at this decision following a comprehensive assessment of domestic and international macroeconomic developments in order to maintain inflation at the targeted level of 5 per cent over the medium term, while enabling the economy to reach its potential.

The Board took note of the effects of the recent developments in taxation and supply-side factors that are likely to pose upside pressures on inflation in the near term.

However, the Board viewed that the impact of these developments would not materially change the medium-term inflation outlook.

Further, the Board noted the space created by past monetary policy easing measures and the decline in the risk premia attached to government securities for further downward adjustment in market lending interest rates.

The Board underscored that the envisaged benefit of further reduction in market lending interest rates needs to be adequately and swiftly passed on to the businesses and individuals by financial institutions.

Inflation is expected to stabilise at the desired levels as the effects of the recent tax adjustments and supply side disruptions are expected to dissipate in the near term.

Headline inflation, as measured by the year-on-year change in the Colombo Consumer Price Index (CCPI, 2021=100), was recorded at 4.0 per cent in December 2023, compared to 3.4 percent in November 2023.

Following five consecutive months of deflation, the food category recorded inflation (year-on-year) in December 2023 reflecting mainly the weather-related disruptions, while non-food inflation (year-on-year) moderated compared to the previous month.

Despite the recent acceleration, headline inflation remains closer to the inflation target of the Central Bank and is in line with the envisaged inflation projections of the Central Bank.

Meanwhile, core inflation (year-on-year) continued to moderate in December 2023, compared to the previous month, reflecting the subdued demand pressures in the economy.

Headline inflation is projected to record an upward movement in the near term, as expected, driven mainly by domestic price  adjustments due to the increase in the Value Added Tax (VAT) and the elimination of certain VATexemptions effective 01 January 2024, disruptions to the domestic food supply, and the dissipation of the favourable statistical base effect.

However, this acceleration of inflation in the near term is expected to be short-lived, and the spillover effects of such one-off adjustments are likely to be muted due to subdued underlying demand conditions.

Therefore, over the medium term, headline inflation is expected to gradually stabilise around the targeted level of 5 per cent (year-on-year), supported by appropriate policy measures.

Government urged to tax political parties and follow the money track

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By: Staff Writer

January 23, Colombo (LNW): Sri Lanka’s crucial 2024 elections, presidential or parliamentary will decide Sri Lanka’s future compelling voters to cast their votes very cautiously and intelligently as it will be their last chance to elect their leader and representatives in parliament to rule the country without fooling masses, several political analysts warned.  

The focus is not only on the economy but also on the need for stronger institutions and governance mechanisms. Weaknesses in governance are largely faulted for triggering the economic crisis.

All these issues may make voter behaviour more unpredictable and tempt presidential or parliamentary election candidates to make impractical promises in their attempt of attracting votes, they said.

While the tax burden is deeply unpopular, Sri Lankans will have to live with higher taxes, a public spending squeeze and a drop in living standards regardless of the promises politicians make before the 2024 elections

In this context, the voters have been advised to think twice before leap as some political parties who have not been able to come to power with the ballot will be trying to fool the people by propagating corruption slogan with a promise punishing previous corrupt rulers and confiscating their wealth.

Therefore intelligent voters have the responsibility of demanding financial reports, Constitutions and manifestos of all the political parties contesting the upcoming elections.

Politics is one of the biggest businesses in the country. Party leaders talk eloquently about endemic bribery and corruption in the country, but political parties are the biggest bribe-takers.

Slush funds are maintained from milking businessmen at village and city levels whose favours have to be returned by doctoring tenders.

These unaccounted-for funds go into paying for party rallies, and buses to transport their supporters, while a part goes to the pockets of organisers. Separately, monies have to be spent to buy members at crucial votes.

Vajira Abeywardena, Member of Parliament, who commented further on this matter, said: There is no other country in the world that has about 75 political parties like Sri Lanka.

That is how the divisions of our country have been created. It has created disunity in the country. That situation also led to many destructions in the country after independence. 

How do these parties get money? There is no system to track who is spending. Therefore, President Ranil Wickremesinghe has passed a bill in the Parliament that will enable him to find out how these parties spend money in elections.

On January 19, 2023, the Parliament of Sri Lanka passed the Regulation of Election Expenditure Bill, the first framework to regulate election campaign finance in the country.

The Leader of Mawbima Janatha Party Dilith Jayaweera said that all funds of political parties should be investigated and brought under income tax.

He noted that the JVP which is campaigning to catch thieves will have to publish the assets and liabilities of its leaders who are leading luxury lives.

Financial records of eight political parties released by the Elections Commissioner through a RTI request put forward by Transparency International Sri Lanka (TISL), several years ago has shown the Janatha Vimukthi Peramuna (JVP) to be the most financially secure and asset rich party among the main political parties.

TISL has released financial records for the parties; JHU, SLMC, JVP, SLFP, UNP, CWC, ITAK and UPFA some time ago.

GMOA to launch strike from tomorrow (Jan 24) over gov’s failure to disburse DAT

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January 23, Colombo (LNW): The Government Medical Officers’ Association (GMOA) is set to launch a continuous strike from tomorrow (24), in response to the non-disbursement of the Disturbance, Availability and Transport (DAT) allowance, Union Secretary Dr. Haritha Aluthge disclosed during a briefing today.

Following the Cabinet’s approval on increasing the DAT allowance from Rs. 35,000 to Rs. 70,000, the government has failed to issue the allowance as promised, the GMOA pointed out.

Official exchange rates in SL today (Jan 23)

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January 23, Colombo (LNW): The Sri Lankan Rupee (LKR) indicates further appreciation against the US Dollar today (23) in comparison to yesterday, as per the official exchange rates issued by the Central Bank of Sri Lanka (CBSL).

Accordingly, the buying price of the US Dollar has dropped to Rs. 315.03 from Rs. 315.50, and the selling price to Rs. 324.82 from Rs. 325.37.

The Sri Lankan Rupee, meanwhile, indicates appreciation against several other foreign currencies as well.

Parliament takes ten-minute break to convene Party Leaders’ meeting

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January 23, Colombo (LNW): Parliament has taken a ten-minute adjournment this (23) morning to convene a Party Leaders’ meeting to address matters related to the proposed Online Safety Bill.

Leader of the Opposition Sajith Premadasa requested that a Party Leaders’ meeting be held prior to a parliamentary debate on the proposed bill.

Accordingly, the Speaker adjourned Parliament for a period of ten minutes.

CEB unionist Ranjan Jayalal to be summoned to Parliament over alleged false claims

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January 23, Colombo (LNW): Trade unionist representing Ceylon Electricity Board (CEB) employees, Ranjan Jayalal, is set to be summoned before Parliament over allegations of disseminating false information, Minister of Power and Energy Kanchana Wijesekara said.

Wijesekera has proposed the summoning of Ranjan Jayalal, accusing him of spreading inaccurate claims.

The Minister clarified that Jayalal falsely asserted that both Parliament and the President’s office had not settled their electricity bills for months.

He emphasised that both institutions have consistently paid their electricity bills, warranting parliamentary scrutiny of Jayalal’s statements.

Dengue situation: 03 deaths and over 7k cases within first 20 days of 2024

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January 23, Colombo (LNW): The National Dengue Control Unit (NDCU) has recorded three dengue-related fatalities with over 7,000 cases being registered within the initial 20 days of 2024.

Jaffna registered the highest number of cases at 1,602, followed by Colombo with 1,536 cases and Gampaha with 637 cases.

Health Minister Ramesh Pathirana expressed concern over the inadequate public support in controlling the dengue spread across the country.

‘Yukthiya’: 955 more suspects arrested

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January 23, Colombo (LNW): 955 more suspects have been apprehended under the ‘Yukthiya’ (Justice) Operation within the last 24 hours, ending at 12.30 am, the Ministry of Public Security disclosed.

Accordingly, 187 grams if heroin, 126 grams of crystal methamphetamine (‘ice’) and 136 narcotic pills have been taken into custody, the Ministry added.

The Yukthiya Operation was launched in December last year to crackdown illicit activities across the island.

Dollar rate at commercial banks today (Jan 23)

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January 23, Colombo (LNW): The Sri Lankan Rupee (LKR) indicates strong steadiness against the US Dollar today (23) in comparison to yesterday, as revealed by leading commercial banks in the country.

At Peoples Bank, the buying price of the US Dollar has dropped to Rs. 314.56 from Rs. 314.80, and the selling price to Rs. 325.52 from Rs. 325.78

At Commercial Bank, the buying and selling prices of the US Dollar remain unchanged at Rs. 313.06 and Rs. 324, respectively.

At Sampath Bank, the buying and selling prices of the US Dollar remain unchanged at Rs. 315 and Rs. 324, respectively.

Today’s (Jan 23) weather: Showery conditions expected in several districts, mainly fair weather to prevail elsewhere

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By: Isuru Parakrama

January 23, Colombo (LNW): Showers or thundershowers may occur at a few places in Sabaragamuwa province and in Galle and Matara districts after 4.00 p.m, but mainly fair weather will prevail in the other areas of the island, the Department of Meteorology said in its daily weather forecast today (23).

There is a possibility of ground frost at some places in Nuwara-Eliya district during the early hours of the morning, the statement added.

Misty conditions can be expected at some places in Sabaragamuwa and Central provinces and in Galle and Matara districts during the morning.

Marine Weather:

Condition of Rain:
Mainly fair weather will prevail in the sea areas around the island.
Winds:
Winds will be north-easterly and wind speed will be (20-30) kmph. Wind speed may increase up to (40-50) kmph at times in the sea areas off the coasts extending from Colombo to Mannar via Puttalam and from Galle to Pottuvil via Hambantota.
State of Sea:
The sea areas off the coasts extending from Colombo to Mannar via Puttalam and from Galle to Pottuvil via Hambantota can be rough at times.