On July 21, the Sri Lankan Rupee faced further depreciation against the US Dollar, prompting commercial banks in Sri Lanka to adjust their exchange rates compared to the previous day.

At Peoples Bank, the buying and selling rates for the US Dollar rose to Rs. 317.26 and Rs. 332.87, respectively, showing an increase from Rs. 315.80 and Rs. 331.34.

Similarly, Commercial Bank reported an increase in the buying rate of the US Dollar from Rs. 317.20 to Rs. 318.19, while the selling rate also rose from Rs. 328.50 to Rs. 329.50.

Meanwhile, at Sampath Bank, the buying and selling rates of the US Dollar have risen to Rs. 319 and Rs. 332, respectively, compared to Rs. 317 and Rs. 330 on the previous day.

The continued depreciation of the Sri Lankan Rupee against the US Dollar poses challenges for the country’s economy and warrants close monitoring by financial authorities and stakeholders.

By: Staff Writer

Colombo (LNW): The Inland Revenue Act and the Appropriation Act will be amended in parallel with the domestic debt restructuring program.

Revealing the next steps to be taken following the approval of the government’s domestic debt optimization (DDO) program, State Minister of Finance Ranjith Siyambalapitiya says that Simultaneously an invitation will be extended to all the retirement funds involved in the program for discussions and following those discussions, if they have any alternative ideas, those will be considered,

“All pension funds involved in this will be invited to join this to exchange ideas and share their data. After that, they are given the opportunity to take the necessary decision.”

He said the Inland Revenue Act will have to be amended to prepare the necessary background for DDO program

He noted “A Appropriation Act has to be amended along with these works. After that, after informing their decision, we can implement this program.”

The Minister said the 9 percent interest given for the retirement funds will be protected and if necessary provisions for the interest will be obtained from the Treasury and that the President has taken the responsibility for the protection of pensioners’ funds.

Cabinet green light has been granted to draft a bill amending the Inland Revenue Act to revise income tax rates levied on the interest income earned from Treasury bonds by superannuation funds, if the fund holders disagree with the domestic debt optimisation (DDO) process.

President Ranil Wickremesinghe, in his capacity as the Minister of Finance, Economic Stabilization, and National Policies, sought Cabinet approval to publish the bill in the Government Gazette and present it in parliament.

Under the DDO, the maturity of Treasury bonds held by superannuation funds, including Employees’ Provident Fund and Employees’ Trust Fund, has been extended from 2027 to 2038 with a step-down coupon structure of 12 percent until 2025 and 9 percent until maturity.

Out of the Rs.8.7 trillion outstanding Treasury bonds, 36.5 percent is held by the superannuation funds.

If these fund holders reject the DDO, the government proposes to increase the tax rate on the interest income of these funds from the current 14 percent concessionary rate to 30 percent standard rate.

The Department of Government Information said the bill prepared in this regard by the Legal Draftsman has received Attorney General’s clearance.

The Cabinet of Ministers on June 28 approved a proposal to introduce amendments to the Inland Revenue Act No. 24 of 2017 for revising the income tax rate levied on the income earned by investing in Treasury bonds by superannuation funds to facilitate the local debt optimisation process.

By: Staff Writer

Colombo (LNW): Some government officials are blocking a USD 135 credit facility from Lloyds Bank Insurance, a group of SME entrepreneurs complained recently.

The President of the Government Registered Micro, Small and Medium Sized Enterprises (MSMEs) Association Leaders’ Collective Benet Jayaratne said that President Ranil Wickremesinghe had also given the green light for the loan proposal and had issued an official statement to go ahead with it.

Lloyds Bank Insurance Company is considered the world’s fourth-largest insurance company.

Explaining the loan facility, Guide Lecturers Association of Sri Lanka General Secretary Aruna Fernando said Lloyds Bank had offered $ 135 million (Rs.41 billion) to Sri Lankan SME entrepreneurs as a credit line at the interest rate of 6 per cent to uplift the micro, MSMEs of the local tourism industry.

“Due to many disasters, this sector has been devastated and this kind of loan will be a relief,” he said.

This MSMEs sector used to grant 70 per cent of contribution to the local tourism industry and there are more than 30 million direct and indirect employment in this sector,” he said.

“This loan can compensate to settle their moratorium and after granting the loan, Lloyds had also introduced a mechanism to recover it,” Fernando said.

“Accordingly, the bank is going to recover it from the foreigners, who visit the country by adding $37 to their airline tickets.

“From that, $ 25 will go as insurance cover for the tourist while the remaining $12 would be used for the repayment of the loan,” he said.

He added that according to the statistics and forecasts of the Sri Lanka Tourist Development Authority (SLTDA) the country is hoping to receive about 20 million foreigners in 2030.“With the target of receiving the tourists the loan will be covered within five years.

“Foreigners, who get this insurance cover, will get comprehensive $50,000 coverage. Unfortunately, there is no relief cover available for any disasters tourists may experience in Sri Lanka.

“The Lloyds Facility includes$ 10 million as sudden disaster relief cover. The MSMEs gave credit to the Tourism Minister. According to his request, Lloyds Bank had promised to issue about $4,000 insurance cover for the registered guides who are registered under the SLTDA.

Government Registered Micro, Small and Medium Sized Enterprises (MSMEs) Association has suggested relevant authorities establish a cooperative establishment society under the supervision of the Central Bank and its Monetary Board to disburse this facility.

“But unfortunately, the approval for the loan facility gets blocked at certain points in the government,” the association charged urging authorities, Ministries, line Ministries, the confidante officers and the persons responsible for the tourism industry to help the MSMEs to get this loan.

N.Lohathayalan.

Indian Prime Minister Narendra Modi has prioritized pursuing a “neighbourhood first” policy with Sri Lanka being at the forefront of this approach. PM Modi has throughout his nine-year tenure as Prime Minister, set an exemplary standard for others to emulate. His transformative endeavours have propelled India from its modest beginnings towards prosperity.

India’s economy has during PM Modi’s tenure, experienced substantial growth, surpassing the 3.5 trillion US dollar mark from its initial 1 trillion dollars in 2014. This progress serves as tangible evidence for Sri Lanka, India’s prominent neighbour, that India is undoubtedly the path to follow in various aspects.

India last week reaffirmed its commitment to the people of Sri Lanka to enable them to use the USD 1 billion Indian credit facility for the procurement of medicine, food and other essentials for one more year. External Affairs Minister (EAM) S Jaishankar recently underscored the importance of India’s “Neighbourhood First” Policy and highlighted the significant financial support of USD 4 billion provided by India to Sri Lanka last year.

The EAM said that India was the first nation to extend assistance to Sri Lanka for debt restructuring and played a crucial role in securing financing assurances from the IMF.  PM Modi has shown remarkable resilience in dealing with various domestic and international crises. Rooted in his humble beginnings, he has applied his personal philosophy to drive India’s transformative journey.

A recent example of his distinct approach was witnessed during the inauguration of the new Parliament, where he chose to walk alone towards the building, halting his motorcade, bodyguards and bureaucrats some 200 meters away. Another testament to his commitment to equality is the appointment of Droupadi Murmu, a member of the tribal community, as the President of India. This decision reflects his dedication to providing equal opportunities to deserving individuals, regardless of their background.

India has provided assistance to Sri Lanka. This includes substantial financial aid and India’s personal guarantee in obtaining the IMF bailout of USD 2.9 billion in support of the country’s economic stability. Senior BJP leader Vijay Jolly asserted “Prime Minister Modi has proved that after completion of nine years in power, he still commands the majority admiration of all Indians in the Republic of India.

He added, “Modi as the Prime Minister has emerged as a global leader and widely accepted by Western leaders and nations alike and has made India politically, militarily and diplomatically vibrant”. He stressed further that their leader has provided Sri Lanka fiscal breather during its serious financial crisis and India stood as an all-weather friend of Sri Lanka. On India’s support of housing in Sri Lanka, Indian High Commissioner to Sri Lanka, Gopal Baglay, highlighted the significant funding for the Indian Housing Projects (IHP). He emphasized the expeditious completion of Phase-3 of the IHP, which aims to construct 4,000 houses through grant assistance from the Government of India (GOI) in the plantation areas of Sri Lanka. These houses are being built across seven districts in the Central, Uva, and Southern Provinces.

1. President Ranil Wickremesinghe visits India on a 2-day official tour: due to meet Indian President Smt. Droupadi Murmu: also will meet PM Narendra Modi & other dignitaries to enhance bilateral relations & explore mutual interests.
2. LKR breaks the Rs.330 per USD barrier and ends at Rs.330.29: down a massive Rs.33.06 or 11.1% from 297.23 per USD on 1st June 2023: T-Bill interest rates escalate in the last 2 weeks: 3-month T-Bills up from 17.79% to 19.99%: 6-month T-Bills up from 15.93% to 17.77%: 12-months T-Bills up from 13.86% to 14.35%.
3. Govt pays a massive Interest for both domestic and foreign debt which is equivalent to Revenue during the first 4 months of this year: Revenue in the first 4 months of 2023 was Rs.821 bn, whereas the Interest expenditure was Rs.818 bn for the same period: Central Bank’s policy measures on 8th April 2022 led to the almost tripling of local interest rates.
4. Second reading of the Central Bank of Sri Lanka Bill passed in Parliament with 66 voting for and 24 against: third reading passed without a vote.
5. Acting Minister of Investment Promotion, Dilum Amunugama says the total of Foreign Direct Investments in Sri Lanka in 2022 was USD 1.75 bn: FDIs for Q1 of 2023 amounted to USD 211 mn.
6. The ASPI of the Colombo Stock Exchange closes at 11,027 points after gaining 99 points (0.91%); S&P SL20 index also gains 21 points (0.65%) to close at 3,205: turnover Rs.4.17 bn.
7. SJB Leader Sajith Premadasa claims that Cesarean surgeries at the Kalutara Teaching Hospital have been halted due to the lack of an anaesthetic drug:
   questions whether the reason for the lack of this medicine was due to a lack of money or the inefficiency of the Govt.
8. Merrill J Fernando, the visionary founder of Dilmah Tea, the world renowned SL tea brand, passes away at the age of 93.
9. SriLanka Telecom Chairman Rohan Fernando says the Board of Directors of SLT has removed him from the post of Chairman.
10. Pakistan beats Sri Lanka by 4 wickets in the first Cricket Test at Galle: lead the series 1-0: Sri Lanka – 312 & 279: Pakistan – 461 & 133/6.

In a significant move, the Education Ministry has announced a one-time exemption for school candidates applying for the G.C.E. Advanced Level 2023 Examination. For this year only, students will be required to have a minimum attendance percentage of 40% to be eligible to sit for the examination.

The decision comes as a relief for students facing challenges with school attendance, ensuring that they will not miss the opportunity to participate in the prestigious Advanced Level Examination. Previously, the minimum attendance requirement stood at 80%, but the lack of a proper mechanism to assess students’ attendance prompted the revision.

The Education Ministry has already issued necessary instructions to principals, urging them to take this opportunity to support and facilitate their students’ participation in the examination.

While the minimum attendance percentage has been reduced to 40% for 2023, the Education Ministry hints that this figure may be subject to change in the future. Plans are underway to review and potentially increase the attendance requirement from the following year, aiming to strike a balance between academic excellence and equitable opportunities for all students.

In a momentous decision, the Central Bank of Sri Lanka Bill was successfully passed with crucial amendments during a parliamentary session yesterday (20). The Bill secured an impressive majority, with 66 votes in favor and only 24 votes against it. Notably, a significant number of Sri Lanka Podujana Peramuna MPs voted in favor of the Bill, solidifying their support.

During the lively debate on the Bill, members from various political parties, including Samagi Jana Balawegaya, National Jana Balawegaya, and Sukanda Janata Sabha, stood firm in their opposition to the proposed changes, making their voices heard.

The Bill’s significance lies in its provisions to grant the Central Bank of Sri Lanka greater independence, aiming to elevate the institution’s autonomy and effectiveness in managing the country’s monetary policies. Over twenty Members of Parliament, both from the ruling party and the Opposition, passionately spoke during the debate, reflecting the bill’s crucial role in shaping the nation’s financial landscape.

This pivotal decision marks a turning point in Sri Lanka’s financial governance, as the Central Bank moves towards becoming a more robust and autonomous institution, empowered to drive the country’s economic growth and stability.

On July 20th, State Minister of Finance, Ranjith Siyambalapitiya, revealed plans to ease import restrictions on 328 additional items. The move comes as the government aims to bolster economic growth and meet consumer demands by allowing a wider array of goods into the country.

The gazette notification detailing the relaxation of import restrictions is set to be released today, providing businesses and importers with clarity on the new measures.

This development follows the recent relaxation of restrictions on 300 items, including electronic equipment, sanitaryware, and food items, which took effect from June 09. However, it’s worth noting that import restrictions on vehicles are expected to remain in place due to prevailing economic conditions, as stated by Siyambalapitiya last month.

Sri Lanka Customs has expressed concerns about reaching revenue targets, especially with the ongoing limitations on vehicle imports. The Sectoral Oversight Committee (SOC) on National Economic & Physical Plans has been engaged in discussions to address this issue and ensure the nation’s economic stability amidst the evolving trade landscape.

Several spells of showers will occur in Western, Sabaragamuwa and North-Western provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts.

Mainly fair weather will prevail elsewhere over the Island.

Strong winds about (40-50) kmph can be expected at times in western slopes of the central hills, Northern, North-Central and North-Western provinces, and in Monaragala, Hambantota and Trincomalee districts.

By: Staff Writer

Colombo (LNW):Sri Lanka is taking steps for economic revival in the backdrop of the first tranche of the bailout package from the International Monetary Fund (IMF) and this would open up opportunities for Indian corporate sector to expand IT sector.

One of the measures the Lanka will pursue is restructuring of its State-owned enterprises. As part of its economic recovery and fiscal consolidation plan, the Sri Lankan government has shown interest in divestment in the airlines, hotels and hospital sectors among other sectors including IT.

IT giant HCL Technologies Ltd is to offer more employment opportunities for Sri Lankans following talks held between the Governor of the Eastern Province, Senthil Thondaman and the company in India.

Thondaman had talks with the Indian IT giant HCL during his recent visit to India to explore opportunities to collaborate in the IT sector.

“During the visit, Governor M Senthil Thondaman met with senior executives of HCL Ltd. in New Delhi.

The discussions focused on opening up a gateway to a 5000-seat facility for Sri Lankan IT talents. The Governor’s proposal received an overwhelming positive response from HCL, reinforcing their commitment to expanding their operations in Sri Lanka,” Thondaman’s office said.

HCL Ltd., a renowned global IT services provider, expressed great interest in investing in Sri Lanka and tapping into its pool of talented IT professionals. The company recognizes the immense potential of the Sri Lankan workforce and the country’s strategic location in the region.

“As a result of the productive discussions, HCL Ltd. is expected to sign an agreement with the Board of Investment (BOI) on the approval of the Chairman Dinesh Weerakody who has also played a supportive role in Sri Lanka to establish this state-of-the-art facility.

This landmark initiative undertaken by Governor M Senthil Thondaman will generate employment opportunities for 5000 IT engineers across Sri Lanka, making it the largest investment in the IT sector in the country’s history,” Thondaman’s office added.

The facility will serve as a hub for HCL’s operations in Sri Lanka, providing a conducive environment for innovation, collaboration, and skills development.

It will leverage the expertise of local IT professionals and enable them to work on cutting-edge projects for both local and international clients.

Thondaman expressed his enthusiasm for this transformative collaboration, stating, “This partnership with HCL Ltd. will pave the way for significant growth in the IT sector and create a multitude of employment opportunities for our talented IT professionals.

We are delighted to have HCL’s support in our mission to position Sri Lanka as a leading IT hub in the region.”

The initiative aligns with the Government’s vision of attracting foreign direct investment and promoting the digital transformation of Sri Lanka’s economy.

It will contribute to the country’s economic growth and reinforce its reputation as an attractive destination for IT and technology-related investments.