Colombo (LNW): Several spells of showers will occur in Western, Sabaragamuwa and North-western provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts, and several spells of light showers may occur in the Northern Province, announced the Department of Meteorology in its daily weather forecast today (10).
Showers or thundershowers may occur at a few places in Uva province during the evening or night, the statement added.
Fairly strong winds about 40 kmph can be expected at times in North-Central province, and in Puttalam, Hambantota, Mannar and Trincomalee districts.
Marine Weather:
Condition of Rain:
Showers or thundershowers will occur at a few places in the sea areas off the coast extending from Chilaw to Matara via Colombo and Galle.
Winds:
Winds will be south-westerly and speed will be (20-30) kmph. Wind speed may increase up to (40-50)kmph at times in the sea areas off the coast extending from Hambantota to Pottuvil and in the sea areas off the coast extending from Puttalam to Kankasanthurai via Mannar.
State of Sea:
The sea areas off the coast extending from Hambantota to Pottuviland sea areas off the coast extending from Puttalam to Kankasanthurai via Mannar will be fairly rough at times. Temporarily strong gusty winds and very rough seas can be expected during thundershowers.
This article is to reveal the documentary proof of the policy irregularity in the Treasury bill issuance on 31 May.
Irregularity in T bill issuances on 31 May
In my blog article on June 7, I revealed a policy irregularity in issuance of T bills worth Rs. 200 bn at the auction held on 31 May and a resulting loss of at least 2.5% on the issuance to public funds. A total of Rs. 200 bn against the offered Rs. 160 bn was accepted.
The loss occurred as the Tender Board determined to keep the weighted average yield rates on all three maturities of T bills at same levels of the previous week’s issuance .
The loss occurred as the Tender Board did not reduce yield rates although information was available with members of the Tender Board that policy interest rates would be cut by 2.5% (from 16.5% to 14%) by the Monetary Board in the same day after noon consequent to drastic disinflation trend reported.
As a result, the loss was accumulated at several subsequent issuances although yield rates were reduced in lags to policy rates cut.
This policy irregularity helped dealers to make an insider profit at a loss to public funds.
T bill issuance on 5 July
Rs. 175 bn was accepted against Rs. 140 bn announced as fiscal conditions were tight.
27 June, policy rates decision by the Monetary Board was advanced to 6 July from 13 July announced earlier. However, the decision had been further advanced to 5 July abruptly without any notice to the public. Speculations were everywhere that another significant policy rate cut would be implemented due to faster disinflation path. Inflation had fallen to 12% in June from 25.2% in May (disinflation more than doubled). I released a blog article on 4 July speculating at least a 5% policy rates cut, given favourable macroeconomic developments in numbers.
Accordingly, policy rates were cut by another 2% to 12% on 5 July.
As the Tender Board had the inside information on the monetary policy decision to be taken (date earlier announced to be on 6 July), yield rates at this T bill issuance were significantly reduced by 3%-5% across the three maturities, i.e., more than the policy rate cut announced. Therefore, the Tender Board as required in its mandate used prevailing circumstances and information to make the issuance decision.
Concluding Remarks
Circumstances relating to both T bill issuances were same.
The Tender Board decision to reduce yield rates on 5 July proves beyond doubt that its decision on 31 May for not reducing yield rate was a material irregularity causing an avoidable loss to public funds.
Criminal proceedings instituted against the CB Governor and several officials in relation to T bond auctions held on 27 February 2015, 29 March 2016 and 31 March 2016 were based on such losses to public funds alleged due to the issuance of bonds in excess of the offered amount despite consideration of circumstances prevailing on tight fiscal conditions and rising interest rates as a direct result of the monetary policy tightening (policy rates hike and absorption of market liquidity through repo auctions). Present CB Governor and several high ranking officials are in the state witness list.
Circumstances prevailing on T bill issuance on 31 May were the very tight fiscal conditions well-known and the relaxed monetary policy (policy rates cut on the table and injection of liquidity to the market through reverse repo auctions).
Therefore, the Tender Board not reducing yield rates despite prevailing circumstances while accepting bids in excess of the announced amount at the auction held on 31 May is a proven irregularity of criminal nature as it has caused an avoidable accumulated loss to public funds (i.e., discounts given to dealers) similar to losses alleged on the three T bond auctions stated above.
Therefore, it is the public duty of audit, supervisory and law enforcement authorities to investigate into T bill issuances from May and July 2023 and to institute criminal proceedings on the avoidable loss on T bill issuance on 31 May. The media reported that a complaint has already been lodged with the Bribery Commission.
Public concerns also are raised on CB’s domestic debt management unsustainability caused by issuances of T bills and bonds at yield rates around 25% to 32% since April 2022 amounting to a gross total around Rs. 15 tn.
(This article is released in the interest of participating in the professional dialogue to find out solutions to present economic crisis confronted by the general public consequent to the global Corona pandemic, subsequent economic disruptions and shocks both local and global and policy failures.)
P Samarasiri
Former Deputy Governor, Central Bank of Sri Lanka
(Former Director of Bank Supervision, Assistant Governor, Secretary to the Monetary Board and Compliance Officer of the Central Bank, Former Chairman of the Sri Lanka Accounting and Auditing Standards Board and Credit Information Bureau, Former Chairman and Vice Chairman of the Institute of Bankers of Sri Lanka, Former Member of the Securities and Exchange Commission and Insurance Regulatory Commission and the Author of 10 Economics and Banking Books and a large number of articles published.
The author holds BA Hons in Economics from University of Colombo, MA in Economics from University of Kansas, USA, and international training exposures in economic management and financial system regulation)
Colombo (LNW): Nine persons were killed while several others were injured in a fatal bus accident in Manampitiya area.
A passenger bus travelling from Polonnaruwa to Kattankudy had collided on the Kotaleeya Bridge at Manampitiya and toppled into the river, according to Police Spokesman Thalduwa.
The injured were hospitalised, according to Police, but unconfirmed reports claimed that nine people were killed in the accident.
Reports also add that the death toll may likely to continue..
Colombo (LNW): President Ranil Wickremesinghe expressed his belief that the tourism industry would significantly contribute to the country’s foreign exchange earnings in the coming decade.
The President highlighted that comprehensive plans had already been formulated to enhance Sri Lanka’s appeal as a tourist destination and stressed that promoting tourism could lead to an increase in per capita income.
He also emphasized the importance of collaborative efforts among all the BIMSTEC countries to develop the BIMSTEC region into a thriving tourism hub, transcending national borders.
He was speaking at the “Transcending Borders – Transforming Lives” program organized by the Indian Tourism Federation at the Bandaranaike International Memorial Conference Hall in Colombo Thursday (06),
Addressing the event, Gopal Bagle, the Indian High Commissioner to Sri Lanka, announced the expansion of flights between Chennai and Jaffna, which now operates only four times a week, to begin operations on a daily basis starting from July 16.
He further mentioned ongoing efforts to resume the long-discontinued ferry service between the two nations, which had remained inactive for several decades Out liming future tourism development plans the president disclosed that Sri Lanka is to exploit new tourism from the 2.5 million to go to 5 million to start with.
It is now looking at the upper end of the markets. Why not have $500 a night to $1,000 a night? We have got to learn from Maldives, the smallest of the South Asian countries. We are trying to put 7 more golf courses in, make Nuwara Eliya the centre of golf, he added.
The government has identified Anew site in Dedduwa in the South , over 1000 acres with water, d for very environmentally friendly tourism.
Another one is next to Horton Plains, another 900 acres which will be another forest reserve where you can have 5-star luxury accommodation.
There are many other places where yachts and yachting will start, with Mannar as one of the headquarters, throughout the Jaffna Lagoon, down into Trincomalee and further down.
It will exploit the railway in different ways, just like you have gone up to Ella. Moreover, we want to hand over a large number of plantation bungalows for boutique hotels.
So there are going to be more and more items that we will add on to it. Food items, dance items, to make Sri Lanka truly known as a worthwhile tourist destination.
The government expects to attract many visitors from Asia, including India, East Asia, South Asia, and West Asia, because it is easier for them to travel. We will open up the Eastern Province, and there will be apartments available for purchase where you can directly stay near the beaches of the Eastern Province.The laws will be changed to accommodate our plans.
Colombo (LNW): Devastated by economic downfall and exhausted by political hypocrisy, a year ago the citizens of Sri Lanka took their voice to the streets and assembled themselves as the “Aragalaya” People’s Movement, and on a historic day, July 09, 2022, hundred thousands of people from all over Sri Lanka marched to Colombo demanding the stepping down of former Head of State Gotabaya Rajapaksa and his regime.
Today (July 09) Sri Lanka marks the first anniversary of the “Aragalaya” People’s Movement and civil activists and concerned individuals held a protest near the Parliament roundabout in Pitakotte this afternoon.
The protest was organised by the Socialist Youth Union (SYU).
Colombo (LNW): In far reaching development that seeks to revive the island’s heritage, the Urban Development Authority (UDA) has signed an agreement to lease on long term the prestigious ‘Visumpaya’ property, located at No. 25, Lillie Street, Colombo 2, to Azotels and Hunas Holdings PLC.
Hunas Holdings PLC together with its Consortium. This visionary conglomerate has joined forces with the esteemed Adrian Zecha (owner of Azotels), the founder and inspiration behind Aman Luxury Resorts, to undertake the ambitious project of restoring this historic landmark.
Nestled in the heart of Colombo, the 4-acre ‘Visumpaya’ property holds significant historical value as one of Sri Lanka’s well-known official residences.
Its colonial mansion, constructed nearly 190 years ago, serves as a testament to the rich past of our nation. Initially named ‘Ackland House’ and used as the Mess House for the Officers of the Ceylon Rifles Regiment, the property later became the Manager’s Quarters and Office for the Colombo Commercial Company.
Following nationalization under the Business Acquisitions Act in the 1970s, the property was transferred to the Government and assigned to the Sri Lanka Navy for refurbishment as a State Guest House. Renamed ‘Visumpaya,’ it has since hosted numerous important events, including the first State Banquet held in honor of the Prime Minister of Japan in 1990.
Adrian Zecha, renowned hotelier with a deep commitment to preserving natural habitats, has been entrusted with the responsibility of leading many remarkable restoration projects, including many UNESCO heritage sites.
With a career spanning over five decades, Zecha has established various luxurious brands such as Regent Hotels & Resorts, GHM hotels, and Aman Resorts.
Since 1988, he has successfully developed 33 exceptional Aman hotels across 23 countries, including two properties in Sri Lanka. Aman resorts are celebrated for providing guests with an unparalleled luxury experience,
while Zecha himself places great importance on responsible tourism and promoting sustainable and socially responsible practices.
In addition to his achievements in the hospitality industry, Zecha is also a dedicated patron of cultural institutions and a committed philanthropist. Zecha’s passion for this new project is clear as he refers to ‘Visumpaya’ as ‘The Jewel of Colombo.
Discussing this landmark partnership, Mr. Zecha extended a personal note of gratitude to Mr. Sugimoto, one of the key members of the Consortium.
“An opportunity of this magnitude has been given to us, and we are aware of our responsibility to make this location a landmark that future generations can relate to. After all it’s our history and our future!” Dhanuka Samarasinghe, Chairman of Hunas Holdings PLC stated as he went on to describe their ambitious vision forward.
The recent launch of the development of their flagship property Hunas Falls Hotel under the Azotels direction, shows their growing momentum as they move forward. Hunas Holdings PLC has expanded its ventures into other hospitality properties, plantations, renewable energy and more, firmly rooting itself to a strong commitment to empower the island’s true potential.
The partnership between Hunas Holdings PLC and Adrian Zecha, focusing on the historically significant ‘Visumpaya’ property, exemplifies the group’s unwavering dedication and visionary approach.
Colombo (LNW): Sri Lanka’s proposed government debt restructuring plan should reduce funding and liquidity risk for non-bank financial institutions (NBFIs), says Fitch Ratings.
The plan avoids direct impact on the local-currency government debt holdings of NBFIs and commercial banks, easing uncertainty over the entities’ capital, funding and liquidity profiles.
Nonetheless, the proposal is only one aspect of the sovereign’s debt sustainability plan, and the weak economic environment continues to pose downside risk to the sector.
The government debt holdings of Sri Lankan NBFIs mainly comprise local-currency treasury securities to meet regulatory liquid-asset requirements and for investment returns.
Finance and leasing companies (FLCs) have boosted government debt securities holdings amid a weak economic outlook, lacklustre lending opportunities and a preference for stronger liquidity buffers at a time of extreme market uncertainty.
Such holdings are not excessive, at around 8% of sector assets at end-March 2023 (end-March 2020: 5%), but any direct impact from a government restructuring plan would have added to asset quality and earnings pressure arising from Sri Lanka’s difficult economic backdrop.
These securities also comprise a larger proportion of banking-sector assets, and any losses arising from a restructuring could have further constrained banks’ capacity and willingness to provide funding to the NBFI sector.
Foreign-currency denominated Sri Lanka Development Bonds will be subject to restructuring, but Fitch-rated NBFIs have no exposure to these instruments.
Fitch Ratings also do not expect the latest proposal to prompt a loss of depositor confidence in the banking system that would raise contagion risk for NBFIs’ deposits and bank funding lines.
For more analysis on the implications for the banking sector, see Sri Lanka’s Domestic Debt Plan a Significant Step for Resolving Bank Uncertainty.
Fitch views the funding and liquidity profiles of Sri Lankan NBFIs as closely linked to that of banks, given the NBFIs’ dependence on banks as a funding source. FLCs sourced approximately 73% of total non-deposit funding from other financial institutions as at end-March 2023, of which the bulk would be from banks.
Similarly, banks are major funding providers for other NBFI sub-sectors, such as securities firms. FLCs’ credit drivers are also linked to those of banks due to their bank-like business models, common prudential regulator and predominant domestic exposure.
Sri Lankan NBFIs continue to face significant downside risks beyond those addressed in the recent proposal. The economy contracted by 11.5% in 1Q23, pressuring the FLC sectors’ already-high non-performing loan ratio of 16% as at end-March 2023, while higher funding costs have crimped net interest margins and profitability.
Fitch Ratings expects economic conditions to remain difficult, particularly for FLCs’ largely sub-prime customer base, despite a modest improvement in inflation, interest rate and exchange rate trends in recent weeks.
Capital markets are likely to stay volatile despite recent positive moves, keeping the financial prospects of securities firms less predictable in the near term. Any resistance from other government debt holders could also hold back the proposal and raise fresh doubts for the domestic financial system.
The debt announcement and subsequent sovereign rating action do not directly impact Fitch’s national ratings on Sri Lankan NBFIs. The ratings remain on Rating Watch Negative (RWN) due to ongoing operating environment risks, which could weaken NBFIs’ credit profiles relative to other entities on the national ratings scale.
Udeni Kaluthantri, a 54-year-old port worker, became an overnight sensation last year for reasons that had nothing to do with his job.
Days after protesters stormed the presidential palace in the Sri Lankan capital Colombo, a video surfaced of Mr Kaluthantri lounging on a bed draped with the presidential flag.
Pictures of young men jumping into the pool inside the palace and bouncing on the presidential four-poster bed had already gone around the world. Mr Kaluthantri’s video joined all of the other imagery as poetic proof of how millions of Sri Lankans were fed up of what they regarded as inept and corrupt governance under President Gotabaya Rajapaksa.
Soon after, Mr Rajapaksa fled the country, resigning days later. It was hailed as a massive win for an unprecedented people’s movement but one year later, Sri Lanka looks quite different.
The people’s struggle
In early 2022, inflation in Sri Lanka skyrocketed as foreign reserves emptied and the country ran short of fuel, food and medicine. Residents experienced up to 13-hour power cuts in what was the worst economic crisis the country had faced since independence.
Many held then president Mr Rajapaksa and his family responsible. While his disastrous economic policies led to the shortfall in foreign currency, the Rajapaksa family was also accused of corruption and siphoning public money. But the Rajapaksas deny any wrongdoing and place blame elsewhere for the crisis: the sharp drop in tourism revenue because of the pandemic and the high cost of fuel after Russia invaded Ukraine.
I was in Colombo last year as crowds gathered at Galle Face Green, a popular beach-facing public space in Colombo. The demonstrations continued day and night, the crowds swelling in the evenings with families, students, priests, nuns, clerics and monks. Driven by the rallying cry “Gota go home”, the protests engulfed the country, uniting Sri Lanka’s three major communities – Sinhalese, Tamils and Muslims – for the first time.
Weeks later, they culminated in extraordinary scenes where protesters stormed the presidential palace, with the intention of forcing Mr Rajapaksa out of power. Mr Kaluthantri was among them. Mr Rajapaksa was not at the palace when the protesters broke in – so they made themselves at home, and took away all sorts of “souvenirs”, from bed sheets to books.
“I took the presidential flags away because I thought Mr Rajapaksa wouldn’t be able to act as president without those official symbols,” Mr Kaluthantri said. Sri Lanka’s presidential flags are unique to each president, and the design changes every time a new leader assumes office.
Five days later, Mr Rajapaksa fled the country and sent his resignation from Singapore. This was seen as a victory for the “aragalaya” or “people’s struggle” as the movement was called.
The decline of the Rajapaksa family would have been unthinkable a few months before. The politically powerful family was popular for crushing the Tamil Tiger separatists in May 2009 and ending the country’s 25-year civil war.
But now, a year on, it is the protesters who are in trouble, while the Rajapaksas and several other politicians singled out by public anger are back in the country – and in positions of power.
What happened?
The crackdown
After Mr Rajapaksa fled the country, veteran opposition politician, Ranil Wickremesinghe was elected as the new president in a parliamentary vote. He was backed by Mr Rajapaksa’s party, which had a landslide majority.
Hours after Mr Wickremesinghe was elected, the military was deployed to clear the crowds at Galle Face. Dozens of soldiers swooped on the site, dismantling tents and other belongings of the demonstrators.
Mr Kaluthantri himself surrendered to police and spent 21 days in custody on charges of desecrating the presidential flag. The case against him continues. “I have no regrets. I did it for the country and people,” says Mr Kaluthanthri, who was suspended from his job for two months.
Image caption, Mr Kaluthantri says he took the flags so Mr Rajapaksa wouldn’t be able to act as president without them
His only regret: “We managed to force Gotabaya Rajapaksa to resign, [but] we were not able to introduce a new political culture.”
With Mr Rajapaksa gone and the new government taking steps to ease the acute shortage of fuel and other essentials, many protesters resumed normal life. The authorities then used force – deploying all the legal and punitive powers at their disposal – to clear the last, most committed of the demonstrators from the protest sites.
Weeks later, Mr Rajapaksa and his brother Basil, who had also fled the country, returned.
The former president is now living in a high-end government bungalow, while many of the members in his cabinet have been reinstated.
The silenced voices
One of those who faced the full wrath of the state was Wasantha Mudalige, a left-wing activist and former convenor of the Inter-University Students Union. He was at the forefront of the protest movement.
Mr Mudalige was arrested under the draconian Prevention of Terrorism Act (PTA) and spent more than five months in prison.
“I could have spent more time in prison if not for the courts. The government cannot suppress protests without solving people’s issues.” Mr Mudalige says.
A court in Colombo dismissed the terror charges against Mr Mudalige in February and ordered his release. The judge said the authorities had misused the act.
Image caption, Hours after parliament elected Ranil Wickremesinghe as president he cracked down on the protests
Many other protesters have also been charged under various laws, and some have been sentenced to prison. Yet many of the protest leaders look back at the movement with pride.
Swasthika Arulingam, a human rights lawyer and a prominent activist, says it was a historic, unorganised movement that attracted people from all walks of life.
“But we have not achieved the long term goals of Aragalaya – like… no change in the political system, no accountability on corruption, and those who are responsible for stealing people’s money are still in power,” she says.
Although the protests have gone silent for now, some protesters like Samadhi Brahmananayake argue that the agitation showed what people’s power can do.
“The protest gave us hope and confidence. We have realised what we can achieve collectively. Several young people now want to become politicians. We have to work towards political change,” says Ms Brahmananayake.
Mr Wickremesinghe’s government secured a $2.9bn dollar bailout from the International Monetary Fund in March. This has enabled Colombo to reach out to other international lenders to kickstart the economy, and find enough dollars to supply fuel, food and cooking gas.
With tourism and remittances from Sri Lankan workers abroad picking up again, the country is clawing its way back but still has a mountain to climb.
Sri Lanka’s total debt, both domestic and foreign, stands around $80 billion and it will be a challenge to repay the loans. Colombo is negotiating with creditors to agree a debt restructuring programme by September.
The government is calling for a 30% write-off in investors’ capital in dollar-denominated bonds. But opposition leaders say this could have an impact on the pension funds of Sri Lankan workers.
The proposals have also sparked concerns among many Sri Lankans and some warn against taking the current calm for granted.
“The country continues to be in a state of economic crisis,” says Ms Arulingam. “In addition to the spiralling cost of living, now there are worries over retirement savings. If people’s living conditions do not improve, they may take to the streets again.”
Colombo (LNW): Former Inspector General of Police (IGP) C.D. Wickramaratne has been granted a further service extension of three months, based on a recommendation by Public Security Minister Tiran Alles.
The service extension was granted by President Ranil Wickremesinghe.
Within the period of three months, the next Senior Deputy Inspector General (SDIG) qualified for the post would be selected.
The Navy apprehended 12 individuals on 07th and 08th July 2023 off Chalei and Chundikulam in Jaffna and Illuppukadawai in Mannar, while they were engaging in illegal fishing activities. During these special operations, the Navy also held 1870 illegally harvested sea cucumbers, unauthorised fishing gear and 04 dinghies used for these illegal acts.
The Navy conducts regular operations in the coastal and sea areas around the island in order to suppress illegal fishing activities performed by people. As an extension of these efforts, the Naval Deployment Veththalakerni in the Northern Naval Command carried out special operations in the dark hours of 07th July and nabbed 09 persons along with unauthorised fishing gear and 03 dinghies, whilst engaging in light-coarse fishing off Chalei and Chundikulam.
In addition, SLNS Buwaneka in the North Central Naval Command apprehended 03 individuals for fishing without valid passes off Illuppukadawai on the evening of 08th July. During this operation, the Navy also held 1870 illegally harvested sea cucumbers and a dinghy which was used for the illegal act.
The apprehended persons, ranging in age from 23 to 58, were from the areas of Dharmapuram, Vallipuram, Chilaw, Mailavapuram, Kallaru, Thalayadi and Walaipadu. Following the apprehensions, the Navy handed over the suspects, their belongings, and the illegally harvested sea cucumbers to the Department of Fisheries and Aquatic Resources, Jaffna and Mannar Assistant Directorate of Fisheries for onward legal action.
Meanwhile, the Navy and Coast Guard conducted a special operation to chase away Indian poaching trawlers from Sri Lankan waters in the dark hours of 08th July 2023. The operation led to the apprehension of 02 Indian trawlers with 15 Indian nationals poaching in Sri Lankan waters off the Delft Island, Jaffna.
The Navy continues to conduct regular patrols and operations in Sri Lankan waters to curb illegal fishing practices of foreign fishing trawlers.
As an extension of these efforts, the Northern Naval Command deployed Fast Attack Craft of the 04th Fast Attack Flotilla and craft of the Sri Lanka Coast Guard to chase away a cluster of Indian poaching trawlers, having spotted they were engaging in illegal fishing in Sri Lankan waters off the Delft Island. In this operation, the Navy held 02 Indian poaching trawlers with 15 Indian fishers continuing to remain in Sri Lankan waters.
The seized trawlers together with Indian fishermen were brought to the Kankesanthurai Harbour and they will be handed over to the Mailadi Fisheries Inspector for onward legal proceedings.
Thus far in 2023, the Navy has seized 12 Indian poaching trawlers and 74 Indian fishermen in island waters and handed them over to authorities for legal action. Meanwhile, the Navy and the Coast Guard continue to carry out such operations for the protection of the marine environment and the livelihood of the local fishing community.
