In a letter addressed to His Excellency Narendra Modi, Prime Minister of the Republic of India, President Ranil Wickremesinghe extended his heartiest congratulations to the Prime Minister, the Indian Space Research Organisation (ISRO) and the people of India, on the remarkable achievement of Chandrayaan-3’s successful soft landing on the lunar south pole, and that being the first time in history.

The President upheld that Sri Lanka having India as the closest neighbour sharing a robust timeless relationship and with both countries being members of the South Asian family, and observed that, it is with immense pride that the nation is celebrating this historic and momentous achievement.

President Wickremesinghe underscored the global significance of Prime Minister Modi’s magnanimous gesture of dedicating this success to all of humanity, which he noted would inspire generations to pursue the advancement of scientific and technological progress. He bestowed best wishes for success in India’s endeavours to attain its future vision of exploring other planets in the solar system.

The situation in the country, particularly with regard to the economy and politics, can be described as stable but stagnant. The economy is stable in that it has not experienced further economic collapse in comparison to the kind witnessed last year when international bankruptcy was admitted.

But the economy still continues to contract, with a contraction of over 11 percent taking place in the beginning part of the year. The shortages of goods and power sources that brought the people on to the streets in angry protest have not recurred. The government’s ability to bring down the rate of inflation and eliminate shortages is recognized, though the shrinking demand due to price increases is continuing to debilitate living standards. The much hyped Domestic Debt Restructuring was a damp squib bordering on fraud.

The Debt restructuring should have been extended for all to improve debt sustainability and equity. No educated business analyst can fathom why they left out even those outside the banking sector for they are going to make a killing. Overnight several bond kings have now been created . What was the crazy reason to raise 10 year bonds and issue them at 30 percent? People were jailed for doing it at doing 5 y bonds at 11% .

The yields the buyers expected to be reprofiled but they have been left out ( unbelievable )- on what grounds is this justified? Someone must go to court . The sorry saga started with the CBSL default. That made Sri Lanka a bankrupt nation . To date no action has been taken against Nandalal Weerasinghe for this arbitrary decision . Further, the differential tax justification does not make any sense – epf being taxed at 14 percent hence they needed to be reprofiled makes no sense. Banks paying 50 percent is incorrect – corporate tax rate is 30 percent and financial vat is 18 percent. So banks are not excessively taxed as implied.

As for moratoriums they did accommodate many borrowers but what other choice did they have – if they foreclosed the recovery value would be very low for liquidation yields lower recovery and if such a large number of businesses were to be foreclosed on the asset sales would have crashed the collateral market – land, cars and businesses.

Interest Rate
The CBSL in a crazy way doubled borrowing rates overnight one year ago . SMEs we’re forced borrow at over 30% . In addition penalties we’re charged . People were willing to stomach it because they expected a haircut on the coupon or deposit rates because of the crazy interest rate policy of CBSL. It was done Nandalal publicly said to control inflation . When we were effectively importing inflation . The inflation creation was not within the country. The DDO therefore very surprisingly did not touch the TBs or the Bonds. Now imagine the money a few people will make at the expense of the tax payers, SMEs and the public. CBSL interest policy has effectively destroyed the livelihoods of over 500000 people according to estimates and destroyed over 25% of the SMEs, all for nothing.

The opposition was hanged publicly for unfair bond trading . What do you call this stupidity ? Who is behind this? They must be named and shamed. The crazy interest policy of the CBSL starting from the sovereign default last year to the crazy interest rates to DDR . These actions must be investigated by a commission. The 2022 interest rate policy of the CBSL was the craziest policy intervention in the history of the CBSL. populist . The domestic debt restructuring should have been part of a broader policy package that effectively addressed the underlying economic problems and debt vulnerabilities. At least now whilst the banks, primary dealers and individuals savor their windfalls ( First Capital Holdings PLC (the Group) announces its outstanding financial performance for the first quarter ended June 30, 2023. The Group reported an impressive Profit after Tax of Rs. 2.81 billion, marking a remarkable leap from Rs. 96 million recorded in the same period last year.7 days ago ) In the absence of any common sense at least the government should bring the borrowing rates to manageable levels given that the 1 year deposit rates are now 9-10% .

Adolf

On August 25, the Sri Lankan Rupee maintained its stability against the US Dollar at commercial banks within Sri Lanka, consistent with the rates observed on the previous day.

At Peoples Bank, the buying and selling rates for the US Dollar remained consistent at Rs. 315.56 and Rs. 330.38, respectively.

According to Commercial Bank, the buying rate for the US Dollar experienced a slight decrease, moving from Rs. 315.70 to Rs. 314.73, while the selling rate remained unchanged at Rs. 328.

At Sampath Bank, the buying and selling rates for the US Dollar remained steady at Rs. 317 and Rs. 328, respectively.

By: Staff Writer

Colombo (LNW): This week’s Treasury bill auction saw weighted average rates increasing across the board, breaking the trend of a four-week streak of continuous declines. The increases were registered at 42, 16 and 12 basis points on the 91-day, 182-day and 364-day maturities respectively to record weighted averages of 17.97%, 15.03% and 13.31%.

A total of Rs. 124.79 billion was accepted as against a total offered volume of Rs. 130 billion at the 1st phase of the auction, while an additional amount of Rs. 15.85 billion was raised at the 2nd phase of the auction. Given below are the details of the 1st phase of the auction.

The secondary bond market saw an increase in activity levels ahead of the Monetary Policy Announcement due today at 7.30 a.m.

The Central Bank of Sri Lanka was seen reducing its Standard Deposit Facility Rate (SDFR) and Standard Lending Facility Rate (SLFR) by 200 basis points at its previous announcement on 5 July.

Trades were seen on the liquid maturities of 01.07.25, 15.09.27, 01.05.28 and 15.05.30 as it changed hands at levels of 13.65% to 13.75%, 13.02% to 13.20%, 12.75% to 12.90% and 12.50% respectively.

The total secondary market Treasury bond/bill transacted volume for 22 August was Rs. 15.88 billion.

In money markets, the DOD (Domestic Operations Department) of Central Bank inject liquidity by way of an overnight reverse repo auction for a volume of Rs. 102.85 billion at a weighted average rate of 11.51%.

A sum of Rs. 60.09 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 12.00%. The net liquidity deficit stood at Rs. 162.94 billion yesterday.

The weighted average rates on overnight call money and repo were registered at 11.54% and 12.00% respectively.

In the Forex market, the USD/LKR rate on spot contracts traded within the range of Rs. 324.00 to Rs. 324.75 yesterday before closing the day at Rs. 324.00/324.25. The total USD/LKR traded volume for 22 August was $ 38.20 million.

Former US President Donald Trump was released on bond after undergoing the booking process at the Fulton County jail in Atlanta, as reported by CNN. He was arrested and booked at the jail on charges related to the Georgia election subversion case.

Trump’s time at the jail lasted approximately 20 minutes. Following his release, he addressed reporters, stating, “I did nothing wrong.” He characterized the criminal case against him as a “travesty of justice” and asserted his right to challenge what he believes to be a dishonest election.

To secure his release, Trump agreed to a USD 200,000 bond along with certain conditions negotiated by his attorneys. These conditions include refraining from using social media to intimidate co-defendants or witnesses in the case. Trump covered the cost of the bond by contributing 10 percent and working with a local bonding company, Foster Bail Bonds LLC.

Notably, Fulton County marks the first case where Trump has had to pay a cash bail. His chances of being released without cash bail were slim in Georgia, given that he was already facing multiple felony indictments in the state.

Protestors gathered outside the jail, chanting slogans against District Attorney Fani Willis, who had charged Trump and 18 others in the election subversion case. Security was heightened around the jail, with more than ten agencies from the Metro Atlanta area present. Canine units and drones were deployed to ensure security.

Fulton County District Attorney Fani Willis had given Trump and his co-defendants a deadline to voluntarily surrender. The charges against Trump and others were part of a 41-count indictment focused on racketeering charges. This marks the fourth set of criminal charges that Trump faces.

By: Staff Writer

Colombo (LNW): Sri Lanka is to promote domestic grape cultivation as it receives support by the expertise of farmers, Agriculture Minister Mahinda Amaraweera has said.

A vineyard started by J G M Bandara in the Uva – Paranagama region has been successful, prompting a visit by the Agriculture Minister.

As Sri Lanka annually spends a lot of foreign exchange to import grapes, Minister Amaraweera was quoted as saying in a statement posted on the state information office facebook.com page.

A program to promote the cultivation of grapes will be developed backed by the expertise of local farmers he added.

The Duch introduced grape cultivation to Sri Lanka two centuries ago. While grapes are grown in other areas, Jaffna is the only one that cultivates them commercially.

There are around 800 grape growers in Jaffna cultivating it in more than 100 hectares and more farmers are joining in due to its commercial value.

Many economic programs are developed in Sri Lanka due to foreign exchange shortages created by the central bank.

The country has high import duties on foods, malnutrition and stunting of young children. Many basic foods including rice, maize are taxed to give protected producers high profits and trade restrictions worsen from time to time as money is printed to boost growth.

Sri Lanka’s inflationist macro-economic elite have resided moving to a consistent monetary regime like a clean float or hard peg, according to critics.

The Dambulla Economic Centre Traders Association said , while the quantity of vegetables from the Jaffna Peninsula was increasing and that a large quantity of grapes grown in Jaffna was being brought into the Centre.

They said in the last few days, they received grapes from Jaffna priced between Rs 1,300 and 1,350 per kilogramme and that with the increase in quantity, the price of grapes had dropped to Rs 900 per kilogramme.

Traders note that because of the low production in other areas there was a high demand for Jaffna grapes.

The Dambulla Economic Centre traders point out that the grape harvest comes in small packages from Jaffna at around 4 a.m., and traders from almost every area in the island come to Dambulla to buy the stock of Jaffna grapes.

Grape cultivators in Jaffna are in for good times as their produce will be made sweeter with new pruning and cultivation methods that will be introduced by agricultural research officers. The sourness of grapes has been a major drawback to grapevine farmers making a living off the crop.

Buddhika Pathirana, Member of Parliament for Matara District under the Samagi Jana Balawegaya (SJB), raised an alarming issue in Parliament on the 23rd, revealing the discovery of counterfeit liquor bottle stickers in over a hundred bars across the nation. These fraudulent stickers were detected in various locations, including Jaffna, Nuwara Eliya, Galle, and Ratnapura, with their origin traced back to a location in the Gampaha district.

MP Pathirana addressed the Finance Minister with his concerns regarding the counterfeit stickers and their widespread use. He emphasized that the issue extends to multiple districts and pointed out a specific address associated with the distribution of these fake stickers.

Drawing historical context into the matter, Pathirana referenced previous incidents involving individuals allegedly connected to the distribution of counterfeit stickers. He urged the State Minister to initiate a thorough investigation into the issue, considering both past and present circumstances, and expressed the importance of holding responsible parties accountable.

In response, Finance State Minister Dr. Ranjith Siyambalapitiya acknowledged the gravity of the situation. He assured Parliament that the counterfeit stickers have been submitted to the Government Analyst for investigation. The State Minister made a commitment to take stringent action against all parties involved, regardless of their rank or position.

Dr. Siyambalapitiya highlighted that the introduction of the sticker system in 2016 aimed to curtail the evasion of liquor taxes by licensed companies. He noted that this system contributed to a significant increase in excise revenue in 2021 compared to the previous year, amounting to Rs. 19 billion. Additionally, he mentioned that alcohol production witnessed an 11 percent upswing.

1. Indian External Affairs Minister S Jaishankar expresses hope for a reconciliation process that addresses the aspirations of the minority Tamil community in Sri Lanka for equality, justice and self-respect: highlights the implementation of the 13 Amendment to the Constitution to achieve the objective: reiterates India’s support for the preservation of Sri Lanka’s multi-ethnic, multi-lingual, and multi-religious identity.
2. Top analysts point out that out of 14 countries that carried out domestic debt restructuring in the last 25 years, Sri Lanka stands alone in targeting pension funds while excluding banks and private creditors: analysts also point out that, based on the CBSL’s own Provident Fund Interest Rate of 29% credited to the CBSL staff in 2022, the EPF Members have suffered a phenomenal loss of 20% of their balances as they are to be credited with only 9% as per the Monetary Board’s recommendation.
3. The Joint Apparel Association Forum (JAAF) says the apparel sector is continuing to undergo distress and has now begun to lose its market share to competing nations: apparel exports in July’23 decline 23% YOY to USD 401mn: cumulatively, for the 7 months – January to July 2023, apparel exports down a massive 19% to USD 2.7 bn.
4. Netherland’s State Secretary for Culture and Media Gunay Uslu to visit Sri Lanka on August 23 to sign the legal document to return the cultural artifacts that were pillaged from Sri Lanka: the objects to include the famous Lewke’s canon, 2 Gold kastanes (ceremonial swords), Singhalese knives, Silver kastane and 2 guns.
5. Western Province Senior Police DIG Deshabandu Tennakoon says Police have launched a special crack-down to completely control organized crimes in the country within the next 6 months.
6. Monetary Board imposes caps on lending interest rates on pawning facilities at 18%, on pre-arranged temporary overdrafts at 23%, & on credit cards at 28%: analysts however point out that the Govt is still paying nearly 18% on its own borrowings in Treasury Bills.
7. President Ranil Wickremesinghe extends his congratulations to the Indian PM Narendra Modi and the people of India, on the achievement of Chandrayaan-3’s successful soft landing on the lunar South Pole for the 1st time in history.
8. Opposition Leader Sajith Premadasa says Sri Lanka had spent USD 320 mn for the launch of SupremeSAT in 2012, while India had spent only USD 263 mn for the entire Chandrayaan programme: urges the Govt to submit a report regarding the massive expenditure on SupremeSAT project: Leader of the House Susil Premajayantha says he was the Minister of Science, Technology and Research from 2015 to 2018, and that he was unaware of such a satellite being launched in Sri Lanka.
9. Minister of Power and Energy Kanchana Wijesekera says a Forensic audit is to be conducted on the fuel distribution scam that had taken place in 2022, using duplicate invoices.
10. Parliament’s Sectoral Oversight Committee on Energy and Transport learns that more than 90% of vehicles running in Sri Lanka are not upto the proper smoke emission standards: also learns that 20% of vehicles fail the smoke emission test annually.