December 23, Colombo (LNW): A few showers may occur in Uva and Eastern provinces and in Matale, Nuwara-Eliya, Polonnaruwa and Hambantota districts, the Department of Meteorology said in its daily weather forecast today (23).
Showers or thundershowers may occur at a few places in Ratnapura, Galle, Matara and Kalutara districts after 2.00 p.m.
Mainly fair weather will prevail in the other areas of the island.
Misty conditions can be expected at some places in Sabaragamuwa and Central provinces and in Colombo, Kaluthara, Badulla, Galle and Matara districts during the early hours of the morning.
Marine Weather:
Condition of Rain:
Light showers may occur in the sea areas off the coast extending from Trincomalee to Pottuvil via Batticaloa. Showers or thundershowers may occur at a few places in the sea areas extending from Balapitiya to Matara via Galle during the evening or night.
Winds:
Winds will be north-easterly to northerly in direction. Wind speed will be (25-35) kmph. Wind speed can increase up to 50 kmph at times in the sea areas off the coast extending from Balapitiya to Mannar via Colombo and Puttalam, and from Matara to Pottuvil via Hambantota.
State of Sea:
The sea areas off the coast extending from Balapitiya to Mannar via Colombo, and Puttalam, and from Matara to Pottuvil via Hambantota will be rough at times. The other sea areas around the island will be moderate.
Temporarily strong gusty winds and very rough seas can be expected during thundershowers.
Afternoon showers, thundershowers expected in several districts: Fair weather to prevail elsewhere (Dec 23)
MSMEs Urge Action on Lending Rates amid Weak Policy Transmission
By:Staff Writer
December 22, Colombo (LNW): Sri Lanka’s Micro, Small and Medium Enterprise (MSME) sector has raised concerns over what it describes as excessive lending rates charged by licenced commercial and specialised banks, arguing that reductions in policy interest rates were not passed on proportionately to borrowers.
In a detailed submission to financial authorities, the Ceylon Federation of MSMEs said the interest-rate transmission mechanism had remained distorted well after the peak of the 2022 economic crisis, placing a sustained cost burden on businesses already weakened by the downturn.
The Federation pointed to the sharp tightening of monetary policy in 2022, when the Central Bank of Sri Lanka (CBSL) raised its Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) to historic highs as part of crisis stabilisation measures. While acknowledging the necessity of those actions at the time, it said subsequent policy easing had not been reflected adequately in retail lending rates
Even when the Average Weighted Prime Lending Rate (AWPLR) had peaked at 29.67% in September 2022, the policy rate was 15.50%. While policy rates have since decreased, market rates continue to trail much higher. According to the submission, by 5 December, the Overnight Policy Rate (OPR) stood at 7.75%, while the AWPLR remained significantly higher at 8.74%, indicating a persistent gap between policy intent and market outcomes.
The Federation argued that this divergence disproportionately affected MSMEs, which rely heavily on bank credit and have limited pricing power to absorb higher financing costs. It said elevated borrowing rates constrained recovery, investment, and employment at a time when economic normalisation was expected to support growth
To underline its case, the submission included profit-after-tax figures of several licenced commercial banks for the 2022-2024 period, showing a marked improvement in earnings during the same years when MSMEs faced elevated interest expenses.
The Federation called on regulators to make fuller use of existing legal and supervisory powers to ensure fair transmission of monetary policy and prevent what it described as unjustified widening of lending spreads. It warned that failure to address the issue could undermine broader economic recovery and weaken confidence among small and medium-scale entrepreneurs. It called on the CBSL to ensure that the banking system paid back the excess interest charged on MSME borrowers.
ADB Irrigation Grant Signals Strategic Push for Sri Lanka Agricultural Resilience
By:Staff Writer
December 22, Colombo (LNW): The Asian Development Bank’s latest grant-backed irrigation initiative in Sri Lanka underscores a growing shift among development partners toward climate adaptation as an economic necessity rather than an environmental luxury.
Signed between the Government of Sri Lanka and ADB, the Transforming Irrigation Systems for Improved Food Security Project aims to introduce climate-resilient irrigation models in selected Dry Zone areas. Funded primarily by a $3 million grant from Japan, with additional Government contributions, the project reflects confidence in targeted, technology-driven interventions to stabilise agricultural output.
ADB’s involvement comes at a time when Sri Lanka’s agriculture sector faces overlapping challenges—declining water availability, unpredictable rainfall, rising production costs and weakening farmer profitability. Traditional irrigation systems, though historically effective, are increasingly ill-suited to these evolving conditions. By piloting closed pipe irrigation networks, ADB seeks to demonstrate how efficiency gains can directly support economic resilience.
From ADB’s perspective, the project offers multiple returns. Improved irrigation efficiency can enhance food security, reduce rural poverty and support macroeconomic stability by easing pressure on food imports. In addition, successful implementation strengthens Sri Lanka’s credibility as a reform-oriented development partner, potentially unlocking future concessional financing.
The choice of pilot locations spanning reservoir-fed systems and small tank cascades—also reflects ADB’s intent to test adaptability across diverse agro-ecological settings. If successful, the model could be replicated regionally, positioning Sri Lanka as a demonstration case for climate-smart irrigation in South Asia.
Nevertheless, development economists caution that aid effectiveness depends heavily on domestic capacity. Execution responsibilities rest with the Agriculture, Livestock, Lands and Irrigation Ministry and the Irrigation Department, institutions that have faced resource and coordination challenges in the past. Delays, cost overruns or weak monitoring could dilute anticipated benefits.
There is also the broader issue of farmer inclusion. Technological upgrades alone may not guarantee productivity gains unless accompanied by behavioural change, training and equitable water governance. Without these, infrastructure improvements risk becoming underutilised assets.
Still, the project aligns with ADB’s broader strategy of linking climate resilience with economic performance. For Sri Lanka, navigating post-crisis recovery and climate vulnerability simultaneously, such partnerships could prove pivotal—provided pilot successes translate into sustained policy commitment and scaled investment.
Recovery Spending After Ditwah Balances Stability and Risk
By:Staff Writer
December 22, Colombo (LNW): Sri Lanka’s plan to inject Rs. 500 billion into the economy for post-Cyclone Ditwah recovery has reignited debate over whether the country can sustain large-scale emergency spending while preserving hard-won macroeconomic stability.
President and Finance Minister Anura Kumara Dissanayake has argued that the fiscal conditions today are fundamentally different from the past, citing record revenue performance, a strong primary surplus, and the elimination of Treasury overdrafts. These improvements, he says, provide sufficient space to finance recovery efforts without triggering a debt or balance-of-payments crisis.
However, the scale of the proposed intervention presents clear economic risks that the Government itself has acknowledged. A significant portion of recovery-related spending—particularly on construction and infrastructure has a high import content. According to the President, road construction alone carries a foreign exchange component of around 18%, raising concerns about increased demand for dollars once funds are released into the domestic economy.
To mitigate these pressures, the Government plans to phase spending carefully and channel a portion of the funds into productivity-enhancing activities through a special commission. External financing will also play a critical role.
Sri Lanka has already requested $200 million from the IMF under the Rapid Financing Instrument and expects further support from the World Bank and the Asian Development Bank. Officials estimate that up to $500 million in additional foreign financing may be required in 2026 to prevent balance-of-payments stress.
Beyond macroeconomic considerations, the effectiveness of the recovery effort will depend heavily on implementation. The President has acknowledged that delivering relief at the ground level could face delays and administrative complexity, as local authorities and Grama Niladharis will be responsible for identifying beneficiaries based on multiple criteria.
The Government has announced a range of relief measures aimed at reviving business activity in cyclone-affected areas. These include refinancing bank loans for large and small businesses, working capital support, and grants for damaged premises. Poultry farmers, who suffered heavy losses, will receive compensation based on the number of birds lost, along with special assistance for backyard farmers.
While these measures are designed to restore livelihoods quickly, economists caution that weak targeting, slow disbursement, or leakages could dilute their impact and undermine public confidence.
At the same time, the Government is pinning part of its optimism on stronger external earnings. Foreign direct investment inflows are expected to reach record levels, tourism revenue is projected to surpass its 2018 peak, and merchandise exports are forecast to approach $18 billion.
As Sri Lanka awaits the World Bank’s rapid damage assessment on Ditwah, the challenge will be to strike a delicate balance supporting recovery without reigniting the vulnerabilities that led to the debt crisis in the first place.
India’s Swift Aid to Sri Lanka: Compassion, Strategy, or Both?
By:Staff Writer
December 22, Colombo (LNW): India’s External Affairs Minister S. Jaishankar’s upcoming visit to Sri Lanka comes at a moment of profound humanitarian need and heightened regional sensitivity. The visit follows New Delhi’s rapid and extensive response to Cyclone Ditwah, one of the deadliest natural disasters Sri Lanka has faced in decades, raising both appreciation and questions about the broader implications of India’s unprecedented assistance.
Cyclone Ditwah, which struck on 27 November 2025, unleashed catastrophic floods and landslides across large parts of the island, claiming more than 500 lives and displacing millions. India responded within hours, launching Operation Sagar Bandhu and becoming the first country to deploy specialised disaster-response teams. Naval vessels already present in Colombo, including the aircraft carrier INS Vikrant, were immediately repurposed for relief operations, enabling rapid delivery of essential supplies.
Over subsequent days, India airlifted large quantities of relief material—tents, medicines, hygiene kits, trauma-care modules and food supplies while deploying elite National Disaster Response Force teams to the worst-affected districts. Indian helicopters and naval assets conducted continuous rescue missions, while an army field hospital treated thousands. Infrastructure support, including temporary bridges, helped restore access to cut-off regions.
For Sri Lanka, grappling with economic fragility and limited disaster-response capacity, the scale and speed of India’s intervention were crucial. Sri Lankan leaders publicly acknowledged the assistance, describing the cyclone as the most severe disaster in recent memory. Against this backdrop, Jaishankar’s visit is expected to focus on reconstruction support, disaster resilience and maritime cooperation.
However, the sheer magnitude of India’s response has prompted debate over whether humanitarian assistance is also serving longer-term strategic interests. Sri Lanka occupies a central position in the Indian Ocean, a region of growing geopolitical competition. India’s “Neighbourhood First” policy and its emphasis on being the first responder in South Asia align closely with its desire to maintain influence and stability in its immediate periphery.
This does not necessarily diminish the humanitarian value of India’s actions. Disaster diplomacy has become an accepted instrument of foreign policy globally, and rapid assistance can both save lives and strengthen bilateral trust. For Sri Lanka, diversified partnerships and reliable regional support remain essential, particularly during crises when speed matters more than pledges.
The key question is not whether India’s assistance carries strategic intent—it almost certainly doe but whether that intent undermines Sri Lanka’s sovereignty or recovery priorities. So far, the aid has been delivered without overt conditionality, focusing on urgent needs rather than long-term leverage.
In this sense, India’s actions reflect a convergence of compassion and strategy. For Sri Lanka, the challenge lies in leveraging such support to rebuild resilience while maintaining balanced regional relations
IMF Cautions Sri Lanka’s Debt Outlook Remains Fragile Despite Recovery Efforts
December 22, Colombo (LNW): Sri Lanka is still considered capable of meeting its repayment commitments, but the margin for error remains narrow, according to the International Monetary Fund’s latest evaluation, which highlights ongoing vulnerabilities beneath recent economic progress.
The IMF stressed that this outlook is heavily dependent on the authorities’ ability to fully and consistently implement the Extended Fund Facility (EFF), which remains central to the country’s recovery path. Any delays or policy reversals, the Fund warned, could quickly undermine gains made so far.
Despite improvements in macroeconomic management, Sri Lanka’s high public debt burden and substantial financing requirements continue to pose serious risks to long-term debt sustainability. The IMF noted that indicators measuring the country’s capacity to repay have weakened slightly since the Fourth Review, reflecting continued pressure on public finances.
Under the combined Rapid Financing Instrument and EFF arrangements, outstanding IMF credit is expected to peak at around 3.1 per cent of GDP in 2027, a projection that remains unchanged from earlier assessments. While this level is considered manageable, it leaves little room for external shocks or policy slippage.
The report emphasised the need for stronger institutions, sustained fiscal discipline and credible policy frameworks to stabilise the economy over the long term. Building resilience against global volatility, the IMF concluded, will be critical to ensuring that Sri Lanka’s recovery translates into durable financial stability rather than temporary relief.
Former Hong Kong Cricketer to Run Length of Sri Lanka for Childhood Cancer Cause
December 22, Colombo (LNW): Rahul Sharma, a 24-year-old exercise physiologist now based in Melbourne and a former Hong Kong under-19 cricketer, is preparing to take on an ambitious endurance challenge by running from one end of Sri Lanka to the other in just seven days to support childhood cancer research.
Sharma is scheduled to begin his journey on December 24 from Point Pedro, the island’s northernmost town, and reach Dondra Head at the southern tip by December 30.
The route stretches roughly 574 kilometres, meaning he will need to average close to 100 kilometres a day in what is expected to be a physically demanding test of stamina and resilience.
Having travelled to Sri Lanka from Mumbai on December 18, Sharma said the run is aimed at raising a minimum of A$20,000 for the Children’s Cancer Institute in Sydney, which is dedicated to improving treatment outcomes and finding cures for childhood cancers.
Born in India and raised in Hong Kong, Sharma took up cricket at the age of ten and later represented Hong Kong at under-19 level between 2018 and 2019. He believes the challenge, which his team says has not previously been attempted in this format, brings together his background in sport and his professional focus on human performance, while supporting a cause close to his heart.
Adding to the fundraising effort, Hong Kong-based charity Erase Poverty has announced it will contribute HK$10,000 if Sharma successfully completes the run as planned.
Rail Services Gradually Restored After Cyclone as Repairs Continue
December 22, Colombo (LNW): Train operations across Sri Lanka are steadily returning to normal in the aftermath of Cyclonic Storm Ditwah, with authorities confirming that close to 70 per cent of the rail network is now functioning again.
Figures issued by the Office of the Commissioner General of Essential Services show that passenger trains are currently running on approximately 1,098 kilometres of track as of December 22.
This represents around 69 per cent of the country’s total railway system, which spans 1,593 kilometres.
Several major routes have already been brought back into service, including large sections of the Northern Line extending to Kankesanthurai, the Southern Line linking Colombo with Matara and Beliatta, as well as selected routes in the Eastern and North Central regions. Officials said priority was given to lines serving high passenger demand and key economic centres.
Despite this progress, a number of rail sections remain closed due to damage caused by the storm. Services are yet to resume on routes connecting areas such as Mannar, Puttalam, Batticaloa and Kandy, along with parts of the hill country line. Repair teams are continuing restoration work, and authorities have indicated that further sections will be reopened in stages as safety checks and repairs are completed.
Justice Minister Opens Terrorism Bill to Public Review Ahead of Revisions
December 22, Colombo (LNW): Justice Minister Harshana Nanayakkara has emphasised that the proposed Prevention of Terrorism legislation remains a working draft and will be revised following public consultation before it is presented to the Cabinet or tabled in Parliament.
Speaking today, the Minister said the draft law, prepared by a committee chaired by President’s Counsel Rienzie Arsecularatne, has been made available on the Ministry of Justice website in Sinhala, Tamil and English. Members of the public have been given until February 28, 2026 to study the document and submit their views, concerns and recommendations.
He explained that all feedback received during this consultation period will be forwarded to the original drafting committee, which will be tasked with reviewing the submissions and introducing amendments where appropriate.
The aim, he noted, is to refine the legislation in a way that balances national security needs with the protection of fundamental rights.
Minister Nanayakkara urged individuals, civil society groups and organisations to actively participate in the process, stressing that broad public engagement is essential to shaping a more balanced and socially responsive law.
Inland Revenue Records Historic High as 2025 Target Reached Ahead of Schedule
December 22, Colombo (LNW): Sri Lanka’s Inland Revenue Department has surpassed a major fiscal milestone after meeting the Government’s full-year revenue target for 2025 several days before the end of the year.
Commissioner General Rukdevi P. H. Fernando confirmed that the department had collected Rs. 2,203 billion by 19 December, achieving the figure set for the entire year.
She described the accomplishment as the largest revenue intake ever recorded by the Inland Revenue Department, reflecting improved compliance and strengthened collection mechanisms.
In a statement, the Commissioner General noted that efforts are continuing to further increase revenue during the remaining days of the year, signalling that the final figures may exceed expectations.
She attributed the achievement to a combination of effective administration and the cooperation of taxpayers across the country.
Fernando also conveyed her appreciation to individuals and businesses for fulfilling their tax obligations, both directly and through indirect taxation. In addition, she acknowledged the commitment of Inland Revenue staff and the support extended by officers in other public and private sector institutions, saying their collective contribution was instrumental in reaching the record-breaking total.