1. Fitch Ratings downgrades SL’s Long-Term Local-Currency Rating to ‘RD’ (Restricted Default) from ‘C’: analysts say SL’s Local Currency ratings is now the same as that for the Foreign Currency, as a result: analysts also say it would now be highly challenging for SL to retain the Forex investment in the local T-Bills & Bonds, as well as attract local investment into the “default status” T-Bills & Bonds.
2. UNP Chairman MP Wajira Abeywardene says the officials of the Ministry of Finance and the Central Bank had no authority to declare bankruptcy on 12th April’22: says a probe by the Intelligence Service must be carried out to find out as to who was behind this conspiracy.
3. Former CB Governor Ajith Nivard Cabraal says the declaration of bankruptcy was not a sudden event, but the outcome of a highly organised campaign to push the country to an admission of bankruptcy, although it was not warranted: queries as to how such a crtitical decision as announcing bankruptcy could have been made by the CB Governor and Treasury Secretary in just the second day of their office, unless it was pre-planned.
4. The Monetary Board, as the “custodian” of the workers’ EPF decides to opt for the Govt’s Debt Exchange offer, which would have been approved by the Monetary Board as the “Economic Advisor to the Govt” : claims it was done in the “best interests” of the members of the Fund: many trade unions and workers’ groups have already expressed acute opposition to the move to cut the EPF balances by about 20%: notwithstanding opposition, the EPF tenders Rs.2,668bn face value of T-Bonds for Debt Exchange on the MB’s instructions.
5. SL economy contracts by a massive 3.1% YOY in the 2nd Qtr of 2023 on the back of the huge contraction of 8.4% in the 2nd Qtr of 2022: follows the contraction of 11.5% shrinkage in the 1st Qtr of 2023 which was on the back of a lower shrinkage of 1.6% in the 1st Qtr of 2022: in the 2nd Qtr of 2023, Agriculture sector grew 3.6%, Industries contracted 11.5% & Services dropped 0.8%.
6. Govt Midwifery Service Assn President Devika Kodithuwakku expresses concern about shortages of maternity staff with 3,000 vacancies, islandwide: says the shortage has badly affected maternal care and is taking a heavy toll on the families they cared for.
7. People in the Kuchchaveli area, along the Trincomalee coast, are deeply concerned about sand exploration activities conducted by the Geological Survey & Mines Bureau, as the sand exploration is ultimately geared towards selling highly valuable heavy mineral sands to foreign entities.
8. Appeal Court orders the CID & other respondents not to remove Nadun Chinthaka alias ‘Harak Kata’ from the place of his present detention, without informing the Judiciary & the Attorney General, until his petition is heard.
9. British Foreign Office says the SL High Commission owes £652,120 as “congestion charges”: historians say the British Govt owes billions of Pounds as “the value of plundered & stolen assets and reparations”, to Sri Lanka.
10. President Ranil Wickremesinghe appoints a 3-member Committee to investigate the allegations in the documentary aired by UK’s Channel 4 on the 2019 Easter Sunday terror attack: Committee to be chaired by retired SC Justice S I Imam, and to consist of retired Air Force Commander Jayalath Weerakkody & Harsha Soza, PC.

In a recent turn of events on September 14, 2023, Fitch Ratings took a significant step by downgrading Sri Lanka’s Long-Term Local-Currency Issuer Default Rating from ‘C’ to ‘RD’. This move came in response to the completion of a complex treasury bond exchange program, part of a broader domestic debt optimization effort. It’s worth noting that the exchange of treasury bills held by the Central Bank of Sri Lanka (CBSL) is still a work in progress.

In a reassuring statement, Fitch expressed its confidence, stating, “We do not believe the completion of the first phase of the restructuring of the sovereign’s local-currency obligations is likely to trigger a loss of depositor confidence in the banking system, leading to a widespread default within the financial system, including for non-bank financial institutions (NBFIs). As such, we expect the banks to continue to service their local-currency obligations, given their better funding and liquidity profiles relative to that of the sovereign.”

However, Fitch has kept the Rating Watch Negative (RWN) status for Sri Lanka’s banks and NBFIs. This move reflects an acknowledgment of the potential risks that may impact their creditworthiness in comparison to other entities on the Sri Lankan national ratings scale. These near-term risks are primarily associated with the aftermath of the sovereign’s debt restructuring and the ongoing constraints in accessing wholesale foreign-currency funding.

Fitch also highlights the need for further clarity in the sovereign debt restructuring process, especially regarding foreign-currency debt. Such clarity could signal a reduction in the challenges that have been affecting the banking sector over the past few quarters, potentially leading to the resolution of the RWN status with an affirmation of the bank ratings.

While local banks have been spared from the rupee debt restructuring, it’s important to recognize the persisting challenges in the broader economic landscape. The anticipated economic contraction and volatile economic variables continue to pose challenges. These factors may exert downward pressure on individual credit profiles, especially for NBFIs, which are often more exposed to cyclically sensitive segments of the economy.

Fitch concludes by underlining the significance of reassessing the sovereign credit profile after the completion of the debt exchange with CBSL, as it will inevitably influence the ratings of banks and NBFIs. The interconnectivity between these institutions and the sovereign’s financial health remains a critical factor.

As the domestic debt optimization program nears its conclusion, there is still a cloud of uncertainty looming over the completion of the foreign-currency sovereign debt restructuring. Any uncertainties in this domain could impact the banking sector, with potential ripple effects on NBFIs, given the banks’ exposure to defaulted foreign-currency sovereign bonds, despite their relatively small share of sector assets (3.6% of assets at the end of the first half of 2023).

Several spells of showers will occur in Western, Sabaragamuwa and Southern provinces and in Puttalam, Kandy and Nuwara-Eliya districts.

Showers or thundershowers may occur at a few places in Eastern and Uva provinces, and in Mullaitivu district during the evening or night.

Fairly strong winds about (40-45) kmph can be expected at times in western slopes of the central hills, Northern, North-central, and North-western provinces and in Trincomalee and Hambantota districts.

General public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.

A letter has been sent to the President informing about the employee rights of Litro Gas Lanka and Litro Gas Terminal Lanka companies.

Litro Gas Lanka and Litro Gas Terminal, which claims a continuous successful business history of 150 years, have decided to be privatized due to the current state economic policies, and Litro Gas Lanka companies, which provide high income to the local economy and a huge contribution to the state’s tax capacity, are very important in the economy of Sri Lanka. The letter informed that efficient companies.

With a minimum number of 200 employees, these companies meet the gas needs of the Sri Lankan consumers and the industrial sector. It has been informed that its employees directly contribute to high productivity and success, and trained professionals for the industry provide their services and they are a strong human resource of this company.

Therefore, it has been stated in the letter that if the Sri Lankan government privatizes this business, it should be made mandatory to provide the employee rights mentioned in the letter, and The National United Litro Guardianship Organization, which represents the entire number of employees, will be strongly declared.

The letter is below.

By: Staff Writer

Colombo (LNW): Despite challenges posed by the economic crisis, Sri Lanka continues to draw tourists in considerable numbers.

Priyantha Fernando, the Chairman of the Sri Lanka Tourism Development Authority SLTDA, released these figures, noting a marked increase in the overall number of visitors this year.

He stressed the need of introducing an aviation policy for the robust tourism development policy to attract 5 million tourists by 2029

Fernando noted a historic lack of synergy between tourism and aviation policies, highlighting the urgent need for a marketing-oriented approach to entice airlines and bolster inbound tourist traffic. “

He claimed that the decades-old aviation policy has shielded the national carrier, restricting Sri Lanka from fully capitalizing on potential tourist markets.

The cumulative count of foreign tourists stands at an impressive46, 308 up to September 12 this year 2023.

This substantial number of arrivals signifies a steady recovery and growth in the tourism sector of the nation, showing the resilience and attractiveness of Sri Lanka as a top travel destination

Tourism industry’s resurgence continues with the country welcoming over 950,000 visitors’ year-to-date (YTD), marking a significant milestone after a three-year hiatus.

During the first 12 days of September, Sri Lanka received 46,308 tourists, propelling the cumulative figure to an impressive 950,626.

For 2023, Sri Lanka Tourism has set an ambitious goal of over 1.55 million visitors. The authorities anticipate 73,893 more arrivals during the following two weeks to meet the monthly target of 120,201 tourists.

India continues to be the strongest source market for Sri Lanka, both for the YTD figures and September arrivals. In the first 12 days of September, a total of 12,252 tourists arrived from India, while visitors were also recorded from the UK, Germany, Russia, and Australia.

This resurgence is a testament to Sri Lanka’s enduring appeal as a tourist destination and its successful efforts in revitalizing the tourism sector after multiple setbacks experienced since 2019 for three consecutive years.

Sri Lanka Tourism Development Authority Chairman, Priyantha Fernando, said that a well-crafted aviation policy has to be formulated to archive the country’s ambitious target of attracting 5 million tourists by 2029.

In June, the International Air Transport Association (IATA) has called on Sri Lanka to take steps towards creating an aviation blueprint for greater economic growth and prosperity through the development of a robust aviation industry.

Over the past 15 months, eight airlines have recommenced their operations in Colombo, driven solely by commercial considerations due to high demand.

However, Fernando stressed that this alone is insufficient, emphasizing the pressing need for enhanced synergy and a comprehensive policy framework to revolutionize and sustain both industries.

By: Staff Writer

Colombo (LNW): The Korean government today assured that they have taken necessary measures to open up new employment opportunities for Sri Lankans in Korea and increase the number of jobs provided to Sri Lankans.

The decision was announced following an official meeting between Korea Labour and Employment Minister Lee Jung-Sik and Minister Manusha Nanayakkara today at the Ministry.

On the invitation of the Sri Lanka Labour and Foreign Employment Minister Manusha Nanayakkara, Korean Minister Lee Jung-Sik arrived in Sri Lanka yesterday morning for a two-day official visit.

They had a long discussion on taking necessary measures to get more employment opportunities for Sri Lankans in Korea.

The Korean Minister told Minister Nanayakkara that after 20 years the EPS system under which foreigners are recruited for employment in South Korea will be amended and as a result Sri Lankan job aspirants will get more opportunities to work in Korea.

Minister Nanayakkara requested that Korea opens up new employment fields such as the garment sector and caregiver sector, and received a positive response from the Korean Minister.

It was discussed that a large number of workers are needed for jobs in the Korean ship construction industry and that there are more opportunities for Sri Lankan skilled workers in that sector.

Minister Lee Jung-Sik further assured the fullest support to every step taken in the future to provide more employment opportunities to Sri Lankans in Korea by further strengthening the bilateral relations between the two countries.

The minister further stated that the agreement was made during a discussion held between the two parties

It had also been agreed to refer 600 people who are currently registered on the Korean job website after passing the Korean language proficiency test under the production sector category for jobs in the shipbuilding sector.

Priority will be given to job seekers registered on the website, whose period for securing a job will expire by December 31 this year.

Accordingly, these jobs are to be provided by shifting the job category from the production sector of the website to the ship construction sector.

Thus, candidates who are willing to change their job category from production to the shipbuilding industry should apply for it as soon as possible, he said.

Minister Nanayakkara also stated that the Korean Human Resources Department has also agreed to conduct examinations and recruit 900 welders and painters for jobs in the shipbuilding industry under the E9 visa category from next year.

He added that the Director of the Korean Human Resources Department has also informed that from next year, the Korean Language Proficiency Test will be conducted using the UBT system instead of the current computer-based CBT system.

By: Staff Writer

Colombo (LNW): The Monetary Board of the Central Bank yesterday declared that opting for the DDO was in the best interest of the members of the EPF based on the two options available, given that a large share of its assets is invested in Treasury bonds.

In a statement, the Monetary Board said it envisaged that of the two options, Debt Exchange (as opposed to Non-Exchange) is distinctly the better option considering the assessments made on the basis of several prudent and realistic assumptions.

Further, the Monetary Board was of the view that with the proposed Debt Exchange and the other reforms being implemented by the Government, the sustainability of public finance will be restored with its ability to service its debt.

The Monetary Board was also cognizant that unless debt sustainability is restored without undue delay, there is a high risk of the Government not being in a position to fully service obligations on the pre-exchange bonds held by the EPF leading to very serious adverse consequences to the EPF.

“Hence, opting for the DDO was in the best interest of the members of EPF based on the two options available, given that a large share of the EPF’s assets is invested in Treasury bonds,” the statement said. The face value of the Treasury bonds portfolio of the EPF is Rs. 3.2 trillion.

“It is also important to note that after the participation in DDO, current balances of EPF members will not be reduced and the Fund will be able to distribute at minimum 9% per annum return to members in the foreseeable future,” the statement added.

The Monetary Board of the CBSL as the custodian of the EPF, having considered the two options decided to opt for the Debt Exchange offer with a long-term view in the best interest of the members of the Fund.

“Accordingly, the EPF tendered Rs. 2., 67trillion face value of Treasury bonds for Debt Exchange, including an additional Rs. 1.49,trillion in excess of the minimum participation requirement considering its comparative benefits to the Fund.

The Government has accepted the same and issued new Treasury bonds to EPF with an equivalent face value,” the statement said.

Members representing the Colombo Port City Economic Commission have confirmed that food stalls within the Colombo Port City, deemed as leisure activities, will be phased out by March 2027. This decision was prompted by inquiries from the Committee on Public Finance regarding the legality of establishing such stalls in an area primarily designed to attract foreign investments.

The discussion transpired during a session of the Committee on Public Finance in Parliament, chaired by Dr. Harsha de Silva. The committee delved into the regulations under the Colombo Port City Economic Commission Act, No. 11 of 2021, slated for presentation in Parliament on Tuesday, September 19.

The committee sought clarification on the legal basis for permitting these food stalls and the rationale behind their removal by 2027. They also inquired whether the Attorney General had been consulted in this matter. Consequently, the committee instructed the Colombo Port City Economic Commission and the Attorney General’s Department to promptly furnish relevant information.

Additionally, the committee inquired about the revenue generated by government activities within the port city. They directed officials to provide comprehensive details for better understanding before approving the regulations.

Given that the Port City is being developed as a distinct landmass under the Smart City concept, the committee questioned whether elements like wastewater management, renewable energy, and proper sewage systems had been incorporated. The committee emphasized the importance of avoiding issues related to inadequate sewage and wastewater management seen in other parts of the country during Port City development.

It was also revealed that government institutions such as the Road Development Authority, Urban Development Authority, and Water Board have allocated significant funds to facilitate Port City construction and development. In light of this, the committee pressed the Commission to elucidate the benefits that taxpayers would reap from these investments.

In response, the Committee on Public Finance instructed Commission members to provide a breakdown of government expenditures related to the Port City and its infrastructure, along with details on revenue streams.

The Committee meeting included the presence of State Minister Dr. Seetha Arambepola and MPs Chandima Weerakkody, Nimal Lanza, Major Pradeep Undugoda, Premnath C. Dolawatte, Madhura Withanage, and Sumith Udukumbura.

Urban Development and Housing Minister Prasanna Ranatunga is championing the revitalization of Minuwangoda city, envisioning it as a thriving commercial center poised to attract businesses, investments, and industrial growth.

During a recent discussion at the Urban Development Authority in Sethsiripaya, Battaramulla, Minister Ranatunga emphasized the need to employ advanced technology and modern urban planning to shape Minuwangoda city for the contemporary world.

The forthcoming Minuwangoda City Development Plan, crafted by Urban Development Authority engineers and architects, is expected to prioritize environmental preservation, ensuring the protection of natural assets such as paddy lands.

Proximity to the Katunayake Bandaranaike International Airport has spurred plans for a new road from the Ambagahawatta area, bypassing Minuwangoda for quicker airport access. As part of the development, the UDA plans to acquire nine acres within Minuwangoda city.

This ambitious endeavor will usher in private hospitals, parking facilities, shopping malls, playgrounds, and amusement parks, ushering in a vibrant transformation for the area.