By: Staff Writer

Colombo (LNW): Former Governor Ajith Nivard Cabraal yesterday urged the Central Bank of Sri Lanka (CBSL) to follow its own advice on lowering interest rates.

Cabraal, joining the television news program, said it is ironic that the CBSL is requesting commercial banks to reduce interest rates when they themselves are paying higher interest rates every week.

“Just yesterday or two or three days ago, the Treasury bill rate went up to over 19%. When the Government and the CBSL on behalf the Government is paying 19% they are asking the banks to reduce their lending rates.

If you want the banks to reduce the rates then you also must ensure that the reduction is taking place from the Government side,” he said.

Cabraal said people do not merely heed to statements of the CBSL but also observe its actions. “If every week the Central Bank is increasing the interest rates, the banks will question as to what is going on and wonder how they can compete with gaining advances and deposits if the CBSL is paying 19% plus for deposits,” he noted.

“We have also got to see that there is a reflection of the ground situation on these rates. We can say goodbye to growth with these interest rates,” he added.

The former governor noted that economic growth has been negative every quarter since the increase of interest rates. “We must revamp these interest rates if we are to witness growth once more,” he opined.

Sri Lanka kept its key interest rates unchanged in a surprise move on Thursday as it chose to wait for the impact of its rate cuts over the previous two months filter through the crisis-hit economy.

It also announced administrative measures to bring down lending rates in certain categories that it said remained high.

The Central Bank of Sri Lanka (CBSL) kept its standing deposit rate and standing lending rate unchanged at 11% and 12% respectively. CBSL had cut rates by a total 450 basis points over June and July.

The bank said it would take targeted administrative measures to reduce specific lending rates it considered excessive and direct banks to reduce overall rupee lending interest rates by an appropriate margin in the period ahead.

CBSL had previously raised rates by a record 1050 basis points till March to contain inflation and cool the teetering economy.

Sri Lanka’s economy crumpled last year after its foreign exchange reserves dropped to record lows, leaving the country struggling to pay for essential imports, decimated the currency, and sent inflation soaring.

Sri Lanka’s key inflation index peaked at 70% year-on-year in September but came down to 6.3% in July after the island nation locked down a $2.9 billion bailout from the International Monetary Fund (IMF).

By: Staff Writer

Colombo (LNW): Sri Lanka expects to forge major deals in its debt restructuring this month as the International Monetary Fund (IMF) conducts the first review of its USD 3 billion loan program.

Legislators this week are likely to pass a bill amending tax laws, clearing a legal hurdle and allowing a domestic bond swap to be completed by mid-September, Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe said at an investor forum on Tuesday (05 Sep.).

Meanwhile, officials are also expected to reach an agreement on how to restructure its foreign debt this month, he said.

After months of delay, Sri Lanka is stepping up efforts to fast-track its debt restructuring to help secure more funds from the IMF and set its economy back on track after it defaulted in 2022.

Sri Lanka’s dollar bondholders and lenders like China and India are closely watching the local debt exchange as creditors seek equal treatment.

Sri Lanka has met International Monetary Fund quantitative targets for June 2023 except state revenues, Central Bank Governor Nandalal Weerasinghe said.

The IMF program has a set of quantitative targets listed as ‘performance criteria’ which has to be mandatorily or seek a waiver and also indicative targets. The central government tax revenue floor of 1,300 billion rupees is an indicative target.

According to data already in the public domain, government tax revenues up to April was 742 billion rupees.

The performance criteria on the fiscal targets is the primary deficit of 113 billion rupees not the revenue target. By April the primary deficit was only 5.29 billion rupees. After June Sri Lanka has since hiked taxes on cigarettes and alcohol.

The IMF program had an inflation target of 31 percent measured by the Colombo Consumers Price Index. The actual was 12 percent.

The central bank was expected to bring down its net international reserves, which were a negative 3540 billion rupees by end December 2022 to 2830 million dollars (a 740 million dollar improvement) by June.

Sri Lanka’s gross reserves have now reached 3.5 billion dollars, Governor Weerasinghe said.Gross official reserves, not counting central bank borrowings, are up about 1.6 billion US dollars from December to June.

As interest rates fall, and credit recovers, the ability to collect reserves reduces. Analysts have warned that IMF programs usually fail in the second year, currencies depreciate due to rates being cut as inflation falls.

The falling currency then triggers public discontent, the electorate loses faith in reforms and reformist governments are overturned.

Colombo (LNW): Director General of the National Transport Commission Dr. Thilan Mirando has been sent on mandatory leave, based on several allegations against him.

The move to send the Commission’s Director General on mandatory leave came in following an initial investigation into the allegations, and in order to carry out the implementation of the recommendation of conducting further investigations without any interruption, said Commission Chairman Shashi Welgama.

A report on the said allegations against Mirando has also been forwarded to the Transport Ministry, he added.

1. University Grants Commission Chairman Professor Sampath Amarathunga says 45,000 students will be enrolled to the state universities for the academic year 2022/23, and that applications will be accepted from 14 September.
   
2. Annual Report of the UN High Commissioner for Human Rights states SL suffers from an extraordinary accountability deficit in relation to war crime atrocities, post-war emblematic cases, torture & deaths in police custody, excesses in crowd control, corruption and abuse of power: asserts those will drag the country further behind, unless addressed.
   
3. National Freedom Front leader & MP Wimal Weerawansa says the present CB Governor is an obedient stooge of the IMF and therefore some Western organisations are calling him the world’s best Central Bank Governor: alleges the present CB Governor declared the country bankrupt after only consulting the President, without exploring alternatives: asserts Pakistan didn’t fall into the same trap that SL fell into, by hurriedly declaring bankruptcy.
   
4. NPP MP Vijitha Herath urges the Govt to immediately remove Director of the State Intelligence Service, Suresh Salley and conduct an inquiry against him and S Chandrakanthan (alias Pillayan) over the allegations re. the Easter Sunday attacks: also says it’s absurd to conduct an inquiry while Salley is still the Director of the State Intelligence Service.
   
5. President Ranil Wickremasinghe says a proposal to tax primary bond dealers will be included in the 2024 budget: Opposition Leader Sajith Premadasa alleges the Govt is putting EPF holders in jeopardy by charging a 30% tax if the EPF does not opt to participate in the “debt optimization process”.
   
6. Cathay Pacific, the award-winning Hong Kong-based airline, announces the resumption of flights to and from Colombo beginning 2February’24.
   
7. Police use tear gas to disperse a protest staged by the Students’ Union of the Peradeniya University in the Peradeniya area.
   
8. Chamber of Mineral Exporters Vice Chairman F A M Farook says SL’s mineral industry is seeking investors to develop the required technology for mineral processing as the country currently lacks such technology due to lack of funding: also says the Chamber has urged the Geological Survey and Mines Bureau to take the lead in this regard.
   
9. SLFP General Secretary MP Dayasiri Jayasekera says he has received a letter from the Party Chairman stating that he has been removed: SLFP chairman Maithripala Sirisena says Jayasekera hasn’t been removed, but that his duties have temporarily been suspended: Sirisena also says he is facing a court case over the SLFP chairmanship.
   
10. Sri Lanka Women’s Cricket team secures their 1st-ever T20I series victory against the English women, winning the 3rd T20I by 7 wickets and sealing the series 2-1: ENG W – 116 all out (19): SL W – 117/3 (17).

PMD: In a significant move towards ensuring the safety and well-being of Sri Lankan migrant workers and enhancing economic prosperity, State Minister for Foreign Employment Promotion, Mr. Jagath Pushpakumara, has announced the development of a comprehensive national foreign employment policy. The policy has been submitted for approval to the Cabinet of Ministers, marking a milestone in Sri Lanka’s commitment to its overseas workforce.

Speaking at a press conference held at the Presidential Media Centre under the theme ‘Collective Path to a Stable Country’, State Minister Jagath Pushpakumara outlined the pivotal achievements of his ministry within a year and its ambitious goals for the future.

“When we took over this ministry, the country was in a situation where it could not even pay for an oil ship coming to this country. But due to the far-sighted decisions taken by President Ranil Wickremesinghe after assuming the office of President, we have been able to make many significant transformations in the field of foreign employment within a short period of one year,” noted State Minister Pushpakumara.

The development of a national foreign employment policy, supported by experts, is a key highlight of the ministry’s achievements. This policy aims to safeguard the rights and security of Sri Lankan expatriate workers and has been submitted for Cabinet approval, reflecting the government’s commitment to their welfare.

Additionally, the State Minister emphasized the ministry’s efforts to combat human trafficking, enhance judicial and investigative activities, and further regulate foreign employment agencies through a comprehensive revision to the Sri Lanka Foreign Employment Agency Act.

In terms of remittances, State Minister Pushpakumara expressed optimism about reaching the target of US $ 7000 million annually, as set by President Ranil Wickremesinghe in 2022. He highlighted that in 2022, 311,056 Sri Lankans registered through the Foreign Employment Bureau to work abroad, and by July 2023, nearly 200,000 had already registered for overseas employment. The total amount of foreign remittances received in 2022 was US $ 3789.40 million, with US $ 3363.6 million received by July 2023.

The State Minister also addressed concerns about illegal money transfers through unregulated channels, stressing the potential harm such practices can inflict on innocent people and urging adherence to legal and transparent remittance channels.

In addition to these accomplishments, State Minister Pushpakumara highlighted various initiatives aimed at improving the lives of migrant workers and their families. These include free insurance for all Sri Lankans registering for foreign employment, scholarships for the children of low-income migrant workers, relief for returning workers after accidents abroad, and extensive training programs to prepare individuals for overseas employment.

The State Minister underscored the importance of registering with the Foreign Employment Bureau and working with registered foreign employment agencies to ensure safe and legal overseas employment. He urged the public to report any attempts by individuals or groups misusing government names to exploit unsuspecting job seekers.

Looking ahead, State Minister Jagath Pushpakumara outlined several upcoming initiatives, including low-interest multi-purpose loan programs, housing projects for expatriate workers, and bilateral agreements with countries to create high-earning labour opportunities.

In concluding remarks, the State Minister stated, “In my capacity as the Minister of State responsible for this portfolio, I implore the public to prioritize the registration process with the Foreign Employment Bureau and to seek overseas employment via formal work visas rather than tourist visas. It is of paramount importance to collaborate solely with registered foreign employment agencies, a list of which is duly publicized on the bureau’s official website. Should any individuals or groups solicit funds, misusing the names of Cabinet Minister or myself, under the guise of facilitating easy foreign employment, I beseech the public to promptly report such incidents to our investigative department. Rest assured, we will take immediate and appropriate action.”

State Minister Jagath Pushpakumara’s comprehensive approach to foreign employment endeavours to establish a secure, prosperous environment for Sri Lankan expatriate workers while actively contributing to the economic advancement of the nation.

Colombo (LNW): Reports are being received on children and women being used for begging, and steps will be taken to curb this situation, emphasised State Minister Geetha Kumarasinghe.

Accordingly, the State Minister noted that she will hold a preliminary discussion with relevant institutions including the police, local authorities, and the National Child Protection Authority to curb this situation.

Attention was drawn to this when the Ministerial Consultative Committee on Women, Children Affairs and Social Empowerment met in Parliament recently under the chairmanship of State Ministers Geeta Kumarasinghe and Anupa Pascual.

It was discussed that the use of children and women for begging has become a business as it is common to hire children for begging, some children are given drugs and used for begging, and women pretend to be pregnant. Although there are legal provisions in this regard, attention was also paid to the issues of proper implementation at the practical level.

The State Ministers directed the officials to take steps to get relevant data in connection with the survey of beggars in this country to be started by the Department of Social Services in September.

Accordingly, it was further decided to prepare a special discussion about this in the coming week and take immediate action.

MPs Pyankara Jayaratne, Sanjeeva Edirimanna, Mudita Prashanthi, Lalith Varankumara participated in the meeting.

Colombo (LNW): The Sri Lanka Transport Board (SLTB) will refurbish and reassign 15 double decker buses for the use in tourism, Daily Mirror reported quoting Transport Minister Bandula Gunawardena.

These buses are in need of repairs at the moment, and later will be used for passenger transport between the Anuradhapura Railway Station and the Sacred City, in a bid to break the monopoly of three-wheeler operations, who happen to charge exorbitant rates from the pilgrims, the Minister told Daily Mirror.

The move will also help strengthening the tourism sector.