By: Staff Writer

January 11, Colombo (LNW): A group of Sri Lanka’s creditor nations and Colombo reached an agreement in principle on debt restructuring for the South Asian nation, Japanese top financial diplomat Masato Kanda said on Wednesday.

Japan co-chairs this group, together with France and India, which is comprised of 14 nations. China is Sri Lanka’s largest bilateral creditor and has not joined this group as a formal member.

Sri Lanka’s finance ministry said the agreement in principle covered approximately $5.9 billion of outstanding public debt and consisted of a mix of long-term maturity extension and reduction in interest rates.

Mired in its worst financial crisis in decades, Sri Lanka has been trying to reach restructuring deals with creditors since last year.

The governor of Central Bank of Sri Lanka (CBSL) says ‘good faith negotiations’ are in progress with commercial creditors to reach an in-principle agreement as soon as possible.

Addressing a special media briefing at the CBSL premises this morning (Jan.10), Nandalal Weerasinghe said the agreement is expected to reach within the next two months.

Sri Lanka reached in-principle agreements with China’s Export-Import (Exim) Bank and the Official Creditor Committee (OCC) in late 2023 on the financial terms of debt treatment.

The OCC was formally formed on May 09 with 17 countries to respond to the Sri Lankan authorities’ request for debt treatment.

It is co-chaired by India, Japan and France (as the chair of the Paris Club). It was established following the launch of a common platform in April 2023 for talks among bilateral creditors to coordinate restructuring of Sri Lanka’s debt.

Agreement with the Chinese Exim Bank was reached in October 2023, covering approximately USD 4.2 billion of outstanding debt. It was followed by the debt deal struck with the OCC which covers USD 5.9 billion of outstanding debt.

The International Monetary Fund (IMF) later said the two agreements are consistent with the 48-month Extended Fund Facility (EFF) arrangement provided to Sri Lanka.

The global lender in March 2023 had approved a USD 2.9 billion bailout package for the island nation to ride out its adverse economic situation.

IMF’s Executive Board completed its first review of the EFF program for Sri Lanka, paving the way for the disbursement of the much-anticipated second tranche of the loan which amounted to USD 337 million. This brought the total IMF financial support disbursed thus far to USD 670 million.

The in-principle deals with the Chinese Exim Bank and the OCC had set the scene for the IMF’s Executive Board to consider clearing the first review.

By: Staff Writer

January 11, Colombo (LNW): In presenting the Online Safety Bill, Sri Lanka’s Public Security Minister faced a torrent of criticism from across the aisle.

The Online Safety Bill has been rightfully criticised for its deliberate vagueness. The Bill purports to be safeguarding individuals “against damage caused by communication of false statements or threatening, alarming or distressing statements”.

The Asia Internet Coalition (AIC), representing major tech companies like Google, Meta, and Amazon, has voiced strong concerns about Sri Lanka’s draft Online Safety Bill, urging the government to make extensive revisions before passing the legislation.

In a letter to Public Security Minister Tiran Alles, the AIC warned that the bill, in its current form, poses several critical threats including the following:

The bill defines “prohibited statements” too broadly, potentially criminalizing legitimate online discourse.

In an era of misinformation and instant social media, a carefully considered move along those lines may be welcome. However, this bill is both blunt and menacing.

It fails to define what such statements may be and instead envisions a five-member Online Safety Commission which would establish these terms and would be directly appointed and dismissed by Sri Lanka’s president.

Commentators in the South of the island have rightfully noted Wickremesinghe’s track record of cracking down on anti-government demonstrators, trade union leaders, and student protesters.

The early weeks of his rule serve as painful reminders.What has often been unstated, however, is how this legislation will deliberately further entrench power for Sinhala Buddhist ideologues.

A key aspect of the bill is to criminalise “offense to religious feelings”. Yet on the island, only one religion continues to reign supreme.

Sri Lanka has already seen the detention of comedians, poets, authors and even tourists who were deemed to have criticised or even poked fun at Buddhism or its ideology.

This bill will grant authorities even more power to detain people over such perceived infarctions. The proposal of the legislation comes at an even more distressing period.

Tech Giants vehemently protests over Sri Lanka’s Online Safety Bill In presenting the Online Safety Bill, Sri Lanka’s Public Security Minister faced a torrent of criticism from across the aisle.

The Online Safety Bill has been rightfully criticised for its deliberate vagueness. The Bill purports to be safeguarding individuals “against damage caused by communication of false statements or threatening, alarming or distressing statements”.

In an era of misinformation and instant social media, a carefully considered move along those lines may be welcome. However, this bill is both blunt and menacing.

It fails to define what such statements may be and instead envisions a five-member Online Safety Commission which would establish these terms and would be directly appointed and dismissed by Sri Lanka’s president.

January 10, Colombo (LNW): The World Bank’s Global Economic Prospects Report reveals that the global economy is on track to record its slowest half-decade of GDP growth in 30 years by the end of 2024.

While the risk of a global recession has diminished due to the strength of the U.S. economy, rising geopolitical tensions pose fresh near-term hazards.

Developing economies face challenges with slowing growth, sluggish global trade, and tight financial conditions.

Global trade growth in 2024 is expected to be half the pre-pandemic decade average.

Developing economies’ borrowing costs, especially those with poor credit ratings, are likely to remain high.

Global growth is projected to slow for the third consecutive year, with developing economies growing only 3.9 per cent. Low-income countries are expected to grow 5.5 per cent, below previous estimates.

Despite the challenges, opportunities exist to turn the tide with accelerated investment and strengthened fiscal policy frameworks.

To meet climate and development goals by 2030, developing countries need a significant increase in investment, approximately $2.4 trillion per year, requiring comprehensive policy packages.

Developing economies can achieve transformation through sustained investment booms, leading to faster convergence with advanced economies, poverty reduction, and quadrupled productivity growth.

However, the report emphasises the need for hard work, including improving fiscal and monetary frameworks, enhancing the investment climate, and strengthening institutions.

The findings also highlight the importance of avoiding boom-and-bust cycles, especially for commodity-exporting developing economies.

Governments in these countries often adopt fiscal policies that exacerbate economic cycles, contributing to increased volatility.

To address this, implementing fiscal frameworks to discipline government spending, adopting flexible exchange-rate regimes, and avoiding capital movement restrictions can help reduce volatility and enhance growth prospects for commodity exporters.

January 11, Colombo (LNW): The Sri Lankan Rupee (LKR) indicates slight depreciation against the US Dollar today (11) in comparison to yesterday, as per leading commercial banks in the country.

At Peoples Bank, the buying price of the US Dollar has increased to Rs. 317.26 from Rs. 316.77, and the selling price to Rs. 328.21 from Rs. 327.81.

As at 10 am this morning, Commercial Bank reveals that the buying price of the US Dollar has dropped to Rs. 315.54, and the selling price remains unchanged at Rs. 326.50. These figures may subject to change later today.

At Sampath Bank, the buying price of the US Dollar has increased to Rs. 318.50 from Rs. 318, and the selling price to Rs. 327.50 from Rs. 327.