Sri Lanka is now almost certain that the US $2.9 billion IMF’s Extended Fund Facility (EFF) would be unlocked soon, and following its release more funds are expected to flow into Sri Lankan coffers, from the World Bank, Asian Development Bank, and other agencies.
However, negotiations over debt restructuring especially with private creditors is still to commence as it is expected to create more complications and prolong for years.
Zambia which received IMF support to overcome Restricted Default in August 2022, still negotiates over debt restructuring.
Although China had issued a letter of assurance to facilitate IMF EFF release, no one knows what is in its plan when restructuring negotiations start in a couple of months
Under this background, in an open letter to Sri Lanka’s official bilateral creditors and the Paris Club creditors, President Ranil Wickremesinghe has requested to foster the coordination required for the International Monetary Fund (IMF) supported programme.
The President has also assured transparency and regular reporting on Sri Lanka’s indebtedness in the letter,
President Wickremesinghe has praised the diligence and expressed his gratitude to the Paris Club creditors and Japan in particular, and to India and China for enabling the cooperation required to arrive at this point and explicitly delivering IMF-compatible financing assurances.
He has conveyed gratitude for other creditor countries that answered the Paris Club creditors’ call to join them.
Further, he has mentioned in the letter that the Sri Lankan government has deployed all efforts to demonstrate its commitment to the EFF (Extended Fund Facility) program and relentlessly engage on the path to reforms.
Thus, a robust reform agenda aimed at achieving debt sustainability, strengthening governance, widening the social safety nets supporting the most vulnerable, and ensuring the growth of an inclusive economy attractive to international business, has been introduced.
He said this is how the government would improve people’s lives and ensure they are first in line to benefit from improvements in our economic conditions.
“The IMF-supported program will be critical to achieving this vision for the country,” he claimed.
Hence, this new era starts with the full implementation of the IMF-supported program and the resolution of Sri Lanka’s debt situation with the official bilateral creditors as long standing partners, as well as with the commercial creditors.
The Head of State also called on the Paris Club bilateral partners, Japan in particular, together with all other official bilateral partners, including India and China, to garner and foster coordination.
The relevant letter also ensured that Sri Lanka committed not to resume debt service to any creditor unless that creditor agrees on a comprehensive debt treatment in line with IMF-supported program parameters and the comparability of treatment principle.
SL President seeks bilateral creditors coordination to unlock IMF EFF
Sri Lanka industry down in February , services continue to decline: PMI
Sri Lanka’s manufacturing sector has continued its decline while services sector businesses have been facing a setback last month, according to a Purchasing Managers’ Index compiled by the central bank.
Manufacturing PMI recorded an index value of 42.3 in February, indicating a continued setback in manufacturing activities on a month-on-month basis.
This setback was driven by subdued performance observed in New Orders, Production, Employment and Stock of Purchases.
The decline in New Orders and Production was mainly driven by subdued demand observed in the manufacture of food & beverages, and textile & wearing apparel sectors.
Many respondents representing the food & beverages sector mentioned that the decline in demand was mainly due to deterioration of purchasing power of the consumers.
However, they expect demand to increase on a month on month basis, targeting the festive season in April. Further, many manufacturers mentioned that the latest round of electricity tariff hike adversely affected their cost structure.
Meanwhile, Employment and Stock of Purchases also continued to decline in line with the decline in New Orders and Production.
It was observed that the manufacturers maintained material stock inventory at a minimum level, considering subdued demand conditions and the declining trend of global commodity prices, freight and exchange rates. Further, Suppliers Delivery Time remained unchanged at the previous month’s level.
Expectations for manufacturing activities for the next three months indicated an improvement, anticipating an increase in demand and production targeting the upcoming festive season, despite the adverse impact of the decline in disposable income.
Services sector PMI dropped to an index value of 48.7 in February 2023 indicating a deterioration across the services sector.
This was driven by the declines observed in New Businesses, Business Activities, Employment and Backlogs of Work.
New Businesses declined in February 2023 compared to January 2023, particularly with the decreases observed in transportation, insurance and postal and courier sub-sectors.
Business Activities in the services sector declined in February 2023 after six months of continuous growth.
Accordingly, business activities related to wholesale and retail trade sub-sector continued to deteriorate amid subdued consumer demand driven by diminishing purchasing power. Further, the transportation sub-sector also continued to decline due to drop in freight volumes.
Meanwhile, human health, insurance and postal and courier sub-sectors also showed decreases during the month. Nevertheless,the financial sector continued to improve with the improvements in deposits.
Employment continued to decline in February due to resignations, migrations and retirements occurred during the month. Meanwhile, Backlogs of Work also decreased during the month in line with the reduction in new businesses.
Expectations for Business Activities for the next three months improved in February amid increase in tourist arrivals, upcoming festive season and expectations of greater economic stability.
Nevertheless, some respondents expressed their concerns over shrinking margins in line with high taxes and electricity tariff and subdued demand due to decline in disposable income.
CBSL does not need additional power. They have failed?
The Architects of the new Act. The USD borrowings under their tenures have ruined Lanka’s Financials for ever.
The government is planing to give their powers lock , stock, and barrel to the new governing body of CBSL. For a start the monetary and exchange policy, management of official international reserves and issue and manage currency of Sri Lanka with added independence to corporate with public international organizations without the sanction of the Parliament (which includes Asian Development Bank and International Monetary Fund will now be totally in the hands of CBSL.
The new Monetary Policy Board will have powers to formulate monetary policy and implementation of exchange rate regime at its sole discretion, also vested with the discretion to the Governing Board to release Deputy Governors to serve in an office or position of public international financial institutions or non-financial institutions; which provides for the releasing of officers of the Central Bank to serve in public international financial institutions and other entities; which provides for Loans to and from foreign institutions and to act as an agent or correspondent of foreign entities at its discretion.
On the Annual financial statements, even depriving the Parliament of powers to decide with regard to the policies and principles embodies therein; Clause 104 limits the accountability of the Central Bank to the Parliament with discretion to decide in offering its support for the economic policy of the Government. Ironically what the parliament and President must do is to establish a commission and find out why the Central Bank failed in its duties under the current law and hold them accountable for that. The current law gives enough powers and duties to the Central Bank to manage and they still failed.
No accountability and no questions have been asked. The Government should prosecute those in the CBSL who failed and neglected the economy. Whoever negotiated this act on behalf of the government certainly needs his/her head examined. The CBSL is a public institution that is responsible for implementing monetary policy, managing the currency of a country, inflation management , price stability and controlling the money supply. Therefore Debt Management and Bank Supervision must be taken out of the Central Bank, they have failed the country and the people over and over again. This new act will only make it worse for the country. It is therefore certainly worth listening to Former President Rajapakse addressing the CBSL Staff including the incumbent Governor Nandalal Weerasinghe. https://youtu.be/MtiHNpDDzgM .
Adolf
NDB Investment Bank expands its wings in the African region
NDB Investment Bank made inroads into the African region by acting as the exclusive Financial Advisor and Manager to the recently concluded transaction of Hela Apparel Holdings PLC.
NDBIB arranged a $ 14 million fund raising via Norfund directly to Hela’s investment holding company earmarked for its operations in the African region.
The funds raised will be used to strengthen Hela’s supply chain partnerships in East Africa, particularly in Kenya and Tanzania.
“NDB Group has been an important partner to Hela for a number of years and has been a reliable source of support throughout our journey.
This transaction with Norfund marks another crucial milestone for both parties and lays a strong foundation for the future of our African operations. said Hela Apparel Holdings PLC Chairman A.R. Rasiah.
NDBIB CEO Darshan Perera said: “NDBIB is no stranger to working with the DFI community and has built strong bonds with such institutions over the last 25 plus years.
Norfund is a key shareholder of our ultimate parent, NDB Bank, and we were able to leverage on our relationship with them to ensure the fund raising for Hela was a resounding success.
He also said: “Leveraging on our longstanding relationship with Hela Group, we are delighted to have advised Hela in our debut transaction in the African region which is also Hela’s first fund raising via a DFI.”
As a pioneer in investment banking, NDBIB has been at the forefront in entering new markets and geographies and placing Sri Lanka on a global scale.
NDBIB, through its group company in Bangladesh, NDB Capital Ltd., established its footprint in the Asian region a decade ago and has offered its expertise to corporates in Bangladesh as well as advisory services to Sri Lankan corporates establishing in Bangladesh.
NDBIB was also the first investment bank in the country to carry out an Initial Public Offering on foreign soil via the landmark IPO of Oreedoo Telecom, Maldives and subsequently that of Maldives Islamic Bank.
“NDBIB has always been a leader in innovation, be it introducing of new products to the capital market or entering new markets and geographies.
NDBIB has lived up to that expectation by debuting in Africa with the Hela fund raising and continuously looking into other regional markets. said NDBIB parent NDB Capital Holdings CEO Senaka Kakiriwaragodage.
NDBIB is the market leader in investment banking in Sri Lanka and intends to proactively pursue market opportunities in South Asia and in the East African region.
It has been instrumental in assisting local companies obtain funding abroad aiding their expansion outside of Sri Lanka and will utilise their experience from transactions such as Hela to further expand its reach.
“In addition to its base in Bangladesh and the Maldives, through this transaction the NDBIB was able to penetrate Africa and NDBIB intends to consistently build relationships with parties in the African region to offer our services as part of its long-term strategy NDBIB Chief Operating Officer Kaushini Laksumanage said.
Rupee depreciates further
According to the exchange rate notes issued by commercial banks today (15), the buying price and selling price of the American dollar has increased further.
Yesterday (14th) the buying price of an American dollar in the Bank of Ceylon was seen as 320 rupees and the selling price as 340 rupees and today those prices are Rs. 326 and Rs.344.
In Sampath Bank, the buying price of an American dollar was seen as 320 rupees and the selling price was seen as 335 rupees, and today the prices have increased respectively to Rs. 330 and to Rs. 345.
Yesterday, the buying price of an American dollar in People’s Bank was Rs. 320.41 and the selling price was Rs. 339.17, and today the prices were recorded as Rs. 325.26 and Rs. 344.31 .
Hatton National Bank’s buying price was Rs. 320 and selling price was Rs. 335 per dollar yesterday, and today the prices are Rs. 327 and Rs. 342.
Yesterday in National Savings Bank, the buying price of one American dollar was Rs. 316.85 and the selling price was Rs. 340.85, and today the prices are Rs. 322.80 and Rs. 344.86 which has been increased.
Govt to take prompt action on, unfinished buildings including Krrish and Hyatt
The government is set to take immediate action on the ongoing unfinished mega mixed development projects and the abandoned unfinished buildings in Colombo municipal area including Hyatt and Krrish projects marred with irregularities and financial misappropriations.
Minister of Urban Development and Housing Prasanna Ranatunga instructed his Ministry Secretary to consult the relevant parties and take a decision regarding these buildings at the Ministerial Consultative Committee meting on Urban Development and Housing recently.
The State Minister Arundika Fernando pointed out that in Colombo area with high commercial value, abandoned and unfinished buildings such as ‘Krrish’ and ‘Hyatt’ are causing a lot of damage to the country’s image.
Therefore, it was emphasized in the committee that immediate action should be taken in this regard.
Despite Colombo being overcrowded with hardly any room for new construction, the city has many buildings which lie disused, neglected and dilapidated which dot the city landscape, many in the heart of the city itself.
Some of these buildings, date back to over a century, as for example the old Colombo Kachcheri building. Destroyed by fire in 2012 the burn’t out building, now an eye-sore, still stands serving no purpose.
In Pettah, buildings once constructed to house market stalls are now used to park vehicles, or are used by street people.
The same fate has befallen the much hyped ‘Floating Market,’ which now stands empty.Dozens of other abandoned marketplaces and warehouses are found within the city limits.
Given that construction sites within the city are in short supply; shouldn’t the authorities be taking steps to renovate these buildings for public benefit?
Delhi-based developer Krrish group had entered into a lease agreement of the 4-acre Transwork House land from the Urban Development Authority for 99 years at Rs. 5 billion for the One mixed development project.
The unfinished,One is a tri-tower US$650 million mixed-use Krrish development project in Colombo, Sri Lanka, estimated to be the 10th largest of its kind in the world. It comprises the Ritz-Carlton Residences, The JW Marriott hotel and The One Residences.
Carlton Residences with 33 floors and one of the three buildings will be serviced and managed by Marriott International, the owning company of The Ritz-Carlton hotels.
The 77-floor JW Marriott hotel building, or the tower will house the country’s first JW Marriott hotel.
Projected to be the tallest building in South Asia the One Residences tower will comprise 92 floors (reaching 376m in height), and offer residential, business and leisure facilities.
All these buildings are still to be completed and this mixed development project tainted by scandalous financial deals has run into further problems and is unlikely to take off in the near future, official sources said.
The other abandoned project in Colombo, the Grand Hyatt is managed by Canwill Holdings (Private) Limited, a joint venture company established to develop the project.
It has received fresh capital infusion to the tune of Rs.2.0 billion from Sri Lanka Insurance Corporation (SLIC), its largest shareholder.
Canwill Holdings is a State-owned joint venture company a subsidiary of Sinolanka Hotels & Spas (Private) Limited. set up to undertake the Hyatt hotel project in Colombo ,
When the property development company was set up, SLIC held 46 percent stake, while the balance was held equally between Litro Gas Lanka Limited and the Employees’ Provident Fund (EPF).
The 47-storey Grand Hyatt Colombo comprising 475 rooms and 84 service apartments along Galle Road in Colombo 03 was initially due to be completed in two years from July 2012, and the massive delays and other alleged irregularities doubled the cost from Rs.30 billion to Rs.60 billion.
Prasanna Ranathunga instructs to take a decision regarding the repossession of abandoned unfinished buildings in Colombo
Minister of Urban Development and Housing Hon. Prasanna Ranatunga instructed the Ministry Secretary recently (10) at the Ministerial Consultative Committee on Urban Development and Housing, to consult with the relevant parties and take a decision regarding the abandoned unfinished buildings in Colombo municipal area. Accordingly, the minister informed to take steps to submit those recommendations to the cabinet.
The Minister instructed this when the Ministerial Consultative Committee on Urban Development and Housing, chaired by the Minister of Urban Development and Housing, Hon. Prasanna Ranatunga, State Ministers, Hon. Arundika Fernando and the Hon. Thenuka Widanagamage, met in Parliament recently (10).
Here, the State Minister Hon. Arundika Fernando pointed out that in Colombo area with high commercial value, abandoned and unfinished buildings such as ‘Krish’ and ‘Hyatt’ are causing a lot of damage. Therefore, it was emphasized in the committee that immediate action should be taken in this regard.
Meanwhile, Minister Hon. Prasanna Ranatunga instructed to the officials to follow some relief program due to the current economic crisis, in collecting the installments from the people who bought the houses of the Housing Development Authority. The minister also advised to take the concessional measures so as not to harm the financial sector of the authority.
The Minister also instructed the officials to arrange for the immediate release of the land belonging to the Coastal Conservation Department (CCD), which can be used for the advancement of the tourism industry, to the relevant investors within the legal framework. It was discussed that it is necessary to provide land for temporary construction for the tourism industry while keeping the right of the land with the department and Bali Islands in Indonesia is a good example for that.
Parliament of Sri Lanka @ParliamentLK @slparliament Parliament of Sri Lanka Accordingly, the Minister also instructed to contact the Ministry of Investment Promotion and carry out related activities.
Members of Parliament Hon. Chandima Weerakkodi, Hon. Upul Mahendra Rajapaksa, Hon. Gunathilaka Rajapaksa, Hon. Jagath Kumara Sumitrarachchi, Hon. Manjula Dissanayake and Hon. Jagath Samarawickrama as well as officers of the institutions under the Ministry of Urban Development and Housing also participated in this meeting.
Sri Lanka Original Narrative Summary: 15/03
- Govt sources say the first tranche of approximately USD 330 mn will be received from the IMF on 22nd March 2023 once the IMF Board approves the 4-year USD 2.9 bn bail-out package on 20th March: President Gotabaya Rajapaksa first sought IMF assistance on 18th March 2022.
- President Ranil Wickremesinghe says debt service to any external creditor will take place only after the creditors agree to the debt treatment plan in line with the IMF-supported programme: reiterates commitment to “comparable treatment to all external creditors”
- Past President and Director of the Chartered Financial Analysts Society Ravi Abeysuriya says the tendency for the LKR to depreciate is very high when the IMF lifts the import controls: LKR crashes from 328.87 to 335.69 against the USD in a single day, recording a massive depreciation of Rs.6.82 (2.1%): analysts expect the LKR to plummet further.
- Chief Prelate of the Malwatte Chapter Most Venerable Thibbatuwawe Sri Siddhartha Sumangala Thera and the Chief Prelate of the Asgiri Chapter Most Venerable Warakagoda Sri Gnanaratana Thera say the Govt must take immediate steps to hold the LG elections: warn that a great deal of dissatisfaction is building up in society as a result of the uncertainty surrounding the post-ponement of the elections.
- Special CID team bring back notorious drug dealers & wanted criminals Nadun Chinthaka alias “Harak Kata” and Salindu Malshika alias “Kudu Salindu” to the island from Madagascar.
- Former State Finance Minister Ajith Nivard Cabraal says the present highly damaging economic contraction is demonstrated by the massive reduction in fuel consumption from Jan’22 to Jan’23: also says the “QR code” rationing scheme is now meaningless as people can’t afford to buy even the rationed quantity: as per the Energy Ministry, consumption of diesel down 54%, petrol down 35%, and kerosene down 75%.
- Top Nidahas Janatha Sandhanaya Spokesman and former Foreign Minister Professor G L Peiris asserts that President Ranil Wickremesinghe would not have challenged the Judiciary without the backing from the ruling SLPP.
- Professionals’ Trade Union Alliance representing over 30 multi-sectoral trade unions scheduled to stage a 24-hour token strike today: sectors include power, water, education, medical, banking, postal, ports and railways: strike said to be against the electricity tariff hike and “unfair” tax policy.
- Cabinet Spokesman says the Govt intends to present an anti-corruption bill in the coming days, at the request of the IMF which has urged Sri Lanka to reduce corruption vulnerabilities through improving fiscal transparency and public financial management, introducing a stronger anti-corruption legal framework, and conducting an in-depth governance diagnostic.
- SLPP Rebel MP and former Industries Minister Wimal Weerawansa says the new Central Bank Bill seems to be designed to create a parallel unelected Govt which is only responsible to the IMF instead of being accountable to Parliament.
‘Harak Kata’ and ‘Kudu Salindu’ brought back to the country
It is reported that the 8 people, including Nandun Chintaka alias Harak Kata and Salindu Malshika alias Kudu Salindu, who were arrested in Madagascar by the country’s security forces, were brought to the island this morning (15).
A team of Criminal Investigation Department officials had recently gone to Madagascar to bring them to Sri Lanka.
Harak Kata and Kudu Salindu are accused criminal suspects who are the main drug traffickers and underworld leaders in the country.
President to form a committee to recommend suitable government hospitals for clinical training for medical students
A committee will be formed by President Ranil Wickremesinghe to identify suitable government hospitals as teaching hospitals to provide clinical training for Medical Students enrolled at the General Sir John Kotelawala Defence University (KDU), Dr. Neville Fernando Hospital, Lyceum Campus and other universities in Colombo, Kalutara, Gampaha, Kurunegala, and Polonnaruwa, without hampering the training of students in State Universities.
Accordingly, State Minister of Health Dr. Seetha Arambepola will be appointed as the Chairperson of the aforementioned Committee, while other appointed members will include Additional Secretary to the Ministry of Health Dr. R.M. Saman Kusumsiri Ratnayake, Additional Secretary (Medical Services) of the Ministry of Health Dr. A.K.S. de Alwis, Chairman – University Grant Commission Senior Prof. Sampath Amarathunga, Senior Consultant Surgeon Prof. Mohan de Silva, Professor in Surgery, Faculty of Medicine USJP Prof. Bawantha Gamage, Senior Consultant Orthopaedics & Trauma Surgeon Dr. Narendra Pinto, Dean -, Faculty of Medicine – KDU Prof. Namal Wijesinghe, President of SLMC Prof. Vajira Dissanayake, President of GMOA Dr. Darshana Sirisena, Executive Director -, University Hospital KDU Prof. J. Balawardane and Director Nursing (Medical Service) – Ministry of Health Mrs. R.L.S. Samanmali.
The Committee will be responsible for studying, reviewing and identifying suitable government hospitals to function as Teaching Hospitals to provide clinical training for Medical Students enrolled at the KDU, Dr. Neville Fernando Hospital, Lyceum Campus and other universities in Colombo, Kalutara, Gampaha, Kurunegala and Polonnaruwa. The Committee is also expected to make recommendations for the necessary developments to upgrade the hospitals identified for the provision of such training and submit a report on the findings and recommendations of the Committee within a period of eight (08) weeks.
President’s Media Division