Colombo (LNW): An earthslip at the 102nd km post has obstructed all four lanes of the Southern Expressway between Pinnaduwa and Imaduwa.
The Road Development Authority recommends motorists to use alternative routes.
IMF says Sri Lanka is still to secure full economic recovery.
By: Staff Writer
Colombo (LNW): The International Monetary Fund (IMF) says despite early signs of stabilization, a full recovery is not yet assured.
Daniel Leigh, a senior official in the International Monetary Fund’s research department said that the people of Sri Lanka have shown remarkable resilience.
“In the face of enormous challenges, Sri Lanka has made commendable progress in implementing difficult but much‑needed reforms.
And these reforms are already bearing fruit, as the economy is showing tentative signs of stabilization.
Inflation is down from a peak of about 70 percent a year ago, in September 2022, down to below 2 percent in September 2023. Gross international reserves have increased. And shortages of essentials have eased,” he said.
Daniel Leigh also said that despite early signs of the stabilization, a full recovery is not yet assured
Meanwhile Finance State Minister Shehan Semasinghe, who is in Morocco to attend the IMF-World Bank 2023 Annual Meetings, has held bilateral talks with senior officials of several global organizations.
In a meeting with Patricia Scotland, the Secretary General of the Commonwealth Secretariat, Semasinghe discussed matters of mutual interest including frameworks for debt management, anti-corruption and government performance management.
The state minister has also had a productive dialogue with Martin Raiser, the World Bank’s Vice President for the South Asia Region.
Taking to X (formerly Twitter), Semasinghe said the meeting focused on the World Bank-supported reforms carried out by Sri Lanka.
Raiser has expressed the World Bank’s fullest commitment to assisting Sri Lanka. The two sides have also discussed the enhancement of support in modernizing agricultural and Small and Medium Enterprises (SMEs) sectors, among other areas of ongoing collaboration.
On Monday (Oct. 09), Semasinghe engaged in a discussion with World Bank’s Executive Director, Parameswaran Iyer about the World Bank-supported programs for Sri Lanka.
The Sri Lankan side has expressed its gratitude for the support provided by the World Bank to the economic stability and the success of the island’s reform efforts.
Semasinghe also met with the IMD’s Executive Director, K. Subramaniam to discuss the progress of the IMF’s Extended Fund Facility (EFF) for Sri Lanka and the current economic conditions including the challenges and opportunities faced by the island’s economy.
The annual meetings of the International Monetary Fund (IMF) and the Word Bank are taking place from October 09-15 in Marrakech, Morocco, where a recent nearby earthquake in September killed more than 2,900 people.
The Boards of Governors of the IMF and World Bank Group (WBG) normally meet once a year to discuss the work of their respective institutions.
Dollar rate at banks today(11)
The Sri Lankan Rupee has experienced a slight depreciation against the US Dollar at commercial banks in Sri Lanka, as compared to the previous day.
At People’s Bank, the buying and selling rates for the US Dollar have risen from Rs. 315.93 to Rs. 316.18 and from Rs. 329.12 to Rs. 329.37, respectively.
According to Commercial Bank, the buying rate for the US Dollar has decreased from Rs. 317.19 to Rs. 316.71, while the selling rate has increased from Rs. 327.50 to Rs. 328.
At Sampath Bank, the buying and selling rates for the US Dollar have increased from Rs. 317 to Rs. 318 and from Rs. 327 to Rs. 328, respectively.
CEB grapples to cover debt interest from revenue despite tariff hike
By: Staff Writer
Colombo (LNW): The Ceylon Electricity Board’s (CEB) cash flow operation is not sufficient to cover its interest obligations this year, despite a 150 percent tariff increase, Fitch Ratings announced yesterday
“This is due to the reduced contribution from low-cost hydro power generation during the year, which compelled CEB to purchase emergency power at higher costs to meet the shortfall,” the rating agency said in a rating report.
“At the same time, energy demand has risen with the gradual recovery of economic activity. CEB has requested an off-cycle tariff hike to cover its increased costs, but it is yet to be approved,” it added.
Fitch Ratings has upgraded CEB’s National Long-Term Rating and the rating on CEB’s senior unsecured debentures to ‘BB+(lka)’, from ‘B(lka)’ with a Stable Outlook.
The upgrade follows the 28 September 2023 upgrade of the Sri Lankan sovereign’s Long-Term Local-Currency Issuer Default Rating (IDR) to ‘CCC-’, from ‘Restricted Default (RD)’.
“CEB’s ratings are equalized with that of its parent, the Sri Lankan sovereign, based on our assessment of a ‘Very Strong’ likelihood of state support under our Government-Related Entities (GRE) Rating Criteria,” Fitch Ratings said.
CEB is Sri Lanka’s monopoly electricity transmitter and distributor and accounts for around 75 percent of the country’s power generation. CEB had Rs.288 billion of debt as at end-June 2023, after the government took over almost Rs.200 billion of projects loans in 2022.
Fitch expects CEB to generate negative free cash flow in the medium term, despite the cost-reflective tariff mechanism, and to depend on the state for expansion and refinancing.
As of end-August 2023, CEB owed Rs.212 billion (June 2023: Rs.208 billion) to state-owned Ceylon Petroleum Corporation (CPC), IPPs and non-conventional renewable energy (NCRE) generators.
The government plans to take over 70 percent of the dues to CPC and the IPPs by end-2023 to ease the burden on CEB. Dues to NCREs stand at 10-11 months at present, and CEB plans to settle them gradually with operating cash flow.
“CEB’s payables may rise in the short-term if the proposed off-cycle tariff hike is not approved,” Fitch noted.
The government plans to unbundle CEB’s generation, transmission and distribution assets across 14 companies established under the Companies Act, as part of Sri Lanka’s energy sector reforms.
Fitch said the bill proposing the restructuring will be presented to parliament in October 2023 for approval.
“We expect the unbundling to provide CEB with autonomy and flexibility, while improving its efficiency and competitiveness.
However, it is too early to ascertain how the restructuring will affect CEB’s credit profile, as the plan’s details are still vague,” it added.
MP Naseer Ahamed’s Expulsion Upheld by Supreme Court
The Elections Commission has been officially notified by the Secretary General of Parliament that MP Naseer Ahamed’s parliamentary seat has become vacant. This significant development follows a recent Supreme Court ruling that upheld the legality of his expulsion from the Sri Lanka Muslim Congress (SLMC).
In April 2022, the SLMC took the decision to expel Naseer Ahamed from the party due to his change in political affiliation, which led to his swearing in as the Environment Minister in the government led by Gotabaya Rajapaksa.
The recent verdict from the Supreme Court reaffirmed the validity and lawfulness of the SLMC’s decision to expel Minister Naseer Ahamed from the party, resulting in the vacancy of his parliamentary seat.
Philippines Finance Minister Encourages Optimism for Sri Lanka’s Economic Challenges
Benjamin E. Diokono, the Finance Minister/Secretary of the Philippines, has offered words of encouragement to Sri Lanka amidst its current economic difficulties. He emphasized the importance of maintaining optimism to overcome the challenges the nation is facing.
Reflecting on the economic hardships that the Philippines experienced in the wake of the COVID-19 pandemic, Minister Diokono, in an exclusive interview with News 1st’s Zulfick Farzan, highlighted how sound structural reforms played a crucial role in his country’s ability to overcome similar challenges.
Minister Diokono also suggested that China should consider forgiving a portion of the debt extended to Sri Lanka, as failure to do so might result in the island nation’s economic struggles persisting. He noted that debt forgiveness has been implemented in similar circumstances and could be a viable solution for Sri Lanka.
He further recommended that Sri Lanka assess its capacity to mobilize domestic resources, which, if achieved, could make it easier for the country to receive support from international financial institutions such as the IMF, World Bank, and regional partners.
This advice was shared during his presence at the 2023 IMF and World Bank Annual Meetings in Morocco, on Tuesday, October 10.
Sri Lanka Original Narrative Summary: 11/10
- Catholic Bishops’ Conference requests copies of reports by international law enforcement & secret service agencies including those from the US, UK, India, China, Australia & Pakistan on the Easter Sunday attack, from President Ranil Wickremasinghe: observes that the President had discussed these reports in a recent interview.
- President Ranil Wickremasinghe directs Police to provide necessary security to the Israelis in SL: says the ongoing conflict in Israel & Palestine would likely lead to a prolonged period of high fuel prices, adversely affecting developing economies including Sri Lanka.
- Chinese Foreign Ministry Spokesman says the Exim Bank of China has reached a “preliminary agreement” with SL, raising prospects of making progress on restructuring the defaulted debt.
- Foreign Minister Ali Sabry says Chinese research vessel “Shi Yan 6” would be allowed to dock in SL on 25th November’23.
- India’s External Affairs Minister Dr S Jaishankar arrives in SL to attend the 23rd Council of Ministers meeting of the Indian Ocean Rim Association, which is being hosted by SL.
- SL Transport Board to carry out emission tests on State owned vehicles with the help of the Vehicle Emission Testing programme in SL: Private Bus Owners’ Assn to withdraw from emission testing from January next year, claiming there is no procedure to conduct emission tests for SLTB buses and State vehicles.
- “Lawyers’ Collective” alleges the rule of law & independence of the Judiciary are at a stake following the recent statements made by the Executive and Members of the Legislature.
- President’s Chief of Staff Sagala Ratnayake has reportedly met US intelligence experts at a secret meeting.
- Pakistan beats SL by 6 wickets in an ICC Cricket World Cup 2023 match played in India: SL 344/9 (50 overs): Kusal Mendis 122, Sadeera Samarawickrama 108, Pathum Nissanka 51: PAK 345/4 (48.2 overs).
- SL wins 5 medals at the Asian Games in China: Tarushi Karunaratne (Gold) in Women’s 800m: Nadisha Dilhani (Silver) in Women’s Javelin: Women’s Cricket (Silver): Men’s 400m relay (Bronze): Women’s 400m relay (Bronze): China wins Championship with a total of 383 medals (201 gold, 111 silver, & 71 bronze): 2nd was Japan with 188 medals (52 gold, 67 silver & 69 bronze): 3rd Korea: 4th India.
Signal Failure Causes Delays on Main Line
The Railways Control Room has reported that a signal failure between the Ganemulla and Pallewela railway stations is causing delays to all train services on the main line. Commuters are advised to plan their journeys accordingly and expect delays until the issue is resolved.
Showers will occur over most parts of the island
Showers or thundershowers will occur over most parts of the island during the afternoon or night.
Fairly heavy showers above 75 mm can be expected at some places in Uva, Central, Sabaragamuwa, and Easten provinces.
A few showers may occur in coastal areas of the western and southern provinces during the morning.
The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.
Sri Lanka, EXIM Bank enter pact concerning Chinese debt
Colombo (LNW): China’s Export-Import Bank (EXIM) has entered a preliminary agreement with Sri Lanka concerning the handling of debts linked to China, announced Wang Wenbin, a spokesperson for China’s Foreign Ministry.
This development comes as Sri Lanka, facing its most significant economic crisis in over 70 years, seeks debt relief from China, its primary bilateral lender.
The country suspended its debt repayments in May of the previous year and is currently in discussions with the International Monetary Fund (IMF) for a US $2.9 billion bailout package.
As of the end of 2022, Sri Lanka’s debt to China’s EXIM stood at US $4.1 billion, equating to 11 per cent of the nation’s foreign currency debt.
While China is committed to assisting Sri Lanka, there is ongoing speculation about whether the IMF requires more information from Sri Lanka’s creditors to proceed with its financial support.
Some of Sri Lanka’s official creditor committee members are allegedly advocating for a debt restructuring deal without China’s involvement.