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Oil Market Jitters Return as Hormuz Disruptions and Diplomatic Friction Fuel Price Gains

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June 22, World (LNW): Global oil prices edged higher on Monday as renewed uncertainty surrounding maritime traffic in the Strait of Hormuz and fragile diplomatic negotiations between Washington and Tehran unsettled energy markets.

Brent crude advanced during early trading, recovering ground after a volatile week, while U.S. benchmark crude posted stronger gains amid concerns that disruptions to one of the world’s most critical shipping routes could tighten supplies in the near term.

Market sentiment was shaken after vessel movements through the Strait of Hormuz slowed considerably over the weekend. The development followed Iran’s announcement that restrictions on passage through the strategic waterway would remain in place, with Tehran accusing both the United States and Israel of breaching terms linked to a recently brokered interim peace arrangement.

Energy analysts warned that expectations of a swift return to normal shipping operations may have been overly optimistic. They noted that Iran is likely to use its influence over the passage as a strategic bargaining tool while wider political and security disputes remain unresolved.

Diplomatic efforts also appeared to face early challenges. Senior American and Iranian representatives held their first formal discussions since the temporary agreement came into effect, but reports indicated significant differences remained between the two sides. Tensions were further heightened by comments from U.S. President Donald Trump, who suggested military action could be reconsidered if negotiations fail to deliver results.

Regional instability continues to cast a shadow over the market. In Lebanon, fresh violence erupted despite a recently announced ceasefire intended to halt months of hostilities. The latest clashes have raised concerns that the broader security situation in the Middle East could deteriorate further, complicating efforts to restore confidence in regional trade and energy flows.

Despite Monday’s gains, crude prices remain well below levels seen earlier in the month. Last week, the market recorded a sharp decline amid expectations that additional oil supplies would become available as tankers delayed by Gulf tensions resumed operations. Traders have also been weighing the possibility that sanctions on Iranian oil exports could be eased if diplomatic progress is achieved.

Iranian officials reported that substantial volumes of crude have already moved through the region in recent days, suggesting exporters are attempting to take advantage of any temporary easing in restrictions. At the same time, several Gulf producers have stepped up efforts to reassure customers by offering additional cargoes to international buyers.

Iraq, one of OPEC’s largest producers, has also signalled plans to gradually increase output in the coming months. Industry observers say the prospect of higher production from Iraq, combined with additional supplies from neighbouring Gulf states, could help offset some of the upward pressure on prices if geopolitical tensions do not worsen.

For now, traders remain focused on developments in the Strait of Hormuz, where even minor disruptions can have significant implications for global energy markets. With diplomatic talks still in their infancy and regional security concerns lingering, analysts expect oil prices to remain highly sensitive to political and military developments across the Middle East.

Dengue Surge Linked to Delayed Response Despite Months of Warning Signs

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June 22, Colombo (LNW): Sri Lanka’s worsening dengue situation could have been mitigated had preventative measures been implemented more swiftly, according to health entomology experts, who say repeated warnings issued earlier this year were not acted upon adequately in several parts of the country.

The Health Entomology Officers’ Association has pointed to administrative delays and inconsistent responses by local authorities as major factors behind the sharp rise in infections recorded in recent months.

Association President Najith Sumanasena said indicators of mosquito breeding activity had been showing a steady upward trend since the beginning of the year. By April, the Breteau Index — a key measure used to assess the prevalence of dengue-carrying mosquito larvae — had exceeded critical levels in numerous areas, signalling a heightened risk of transmission.

He explained that the growing threat had been communicated to relevant authorities through the National Dengue Control Unit, enabling provincial administrations to take precautionary action. However, while some regions moved quickly to strengthen control measures, others were slow to respond, allowing mosquito populations to expand and increasing the likelihood of widespread transmission.

According to Sumanasena, the delays in implementing vector-control programmes, public awareness campaigns and environmental clean-up efforts played a significant role in the spike in cases seen by mid-year.

He also highlighted a biological factor behind the outbreak, noting that a dengue virus strain similar to the one responsible for the major 2017 epidemic has resurfaced in 2026. Because a large segment of the population has limited immunity to this strain, health experts believe it has created conditions for more rapid spread.

Meanwhile, Community Physician Specialist Dr Prashila Samaraweera of the National Dengue Control Unit reported that 45,037 dengue infections and 28 related deaths had been recorded across the country so far this year.

The highest concentration of cases continues to be reported from Colombo, Gampaha, Matara, Kalutara, Ratnapura, Galle and Nuwara Eliya districts, which remain under close surveillance by health authorities.

Dr Samaraweera stressed that controlling dengue cannot be achieved through government intervention alone and called for greater public participation in prevention efforts. She emphasised that the removal of stagnant water and other mosquito breeding sites remains the most effective defence against the disease.

Health officials are urging households, businesses and community organisations to carry out regular inspections of their premises and take immediate action to eliminate potential breeding grounds, warning that sustained public cooperation will be essential in curbing the outbreak during the months ahead.

Sri Lanka Sees Dip in Tourism Income Despite Strong Growth in Remittance Inflows

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June 22, Colombo (LNW): Sri Lanka’s tourism sector experienced a setback during the first five months of 2026, with earnings falling noticeably compared to the same period a year earlier, according to the latest figures released by the Central Bank of Sri Lanka.

Data showed that tourism revenue generated between January and May reached US$ 1.36 billion, marking a decline from the US$ 1.54 billion recorded during the corresponding period in 2025. The decrease represents a year-on-year contraction of nearly 12 per cent, highlighting challenges faced by the industry despite ongoing efforts to attract more international visitors.

The downward trend was also reflected in May’s performance. Tourism earnings for the month stood at US$ 155.7 million, compared with US$ 164.1 million in May last year, indicating softer revenue generation from the sector.

In contrast, the country recorded a substantial increase in foreign remittance inflows, providing a welcome boost to the economy. Between January and May 2026, remittances sent home by Sri Lankans working overseas amounted to US$ 3.91 billion.

This was significantly higher than the US$ 3.10 billion received during the same period in 2025, underscoring the growing contribution of overseas workers to the nation’s foreign exchange reserves and overall economic stability.

Many provinces to further witness showers, thundershowers (June 22)

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June 22, Colombo (LNW): Showers or thundershowers will occur at times in Western, Sabaragamuwa and North-western provinces and in Galle, Matara, Kandy and Nuwara-Eliya districts, the Department of Meteorology said.

Showers or thundershowers may occur at a few places in Uva and Eastern provinces after 2.00 p.m.

Fairly strong winds about (30-40) kmph can be expected at times over Western slopes of the central hills, Northern, North-central, North-western and Southern provinces and in Trincomalee district.

The general public is kindly requested to take adequate precautions to minimise damage caused by temporary localised strong winds and lightning during thundershowers.

Marine Weather:

Condition of Rain: Showers or thundershowers may occur at several places in the sea areas off the coast extending from Chilaw to Matara via Colombo and Galle.

Winds: Winds will be south-westerly. Wind speed will be (30-40) kmph. Wind speed can increase up to (55-60) kmph at times in the sea areas off the coast extending from Hambantota to Pottuvil and from Mullaitivu to Puttalam via Kankasanthurai and Mannar.

State of Sea: The sea areas off the coasts extending from Hambantota to Pottuvil and from Mullaitivu to Puttalam via Kankasanthurai and Mannar 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.

Sri Lanka’s Solar Boom Sparks Urgent Safety Concerns

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By: Staff Writer

June 21, Colombo (LNW): As Sri Lanka races toward a cleaner energy future, a growing number of households, businesses, and industrial facilities are embracing rooftop solar power systems and battery energy storage technologies. While these innovations promise lower electricity bills, greater energy independence, and reduced carbon emissions, experts are warning that the country’s rapid renewable energy expansion may be outpacing critical safety measures.

The issue came under the spotlight at a recent technical forum organised by the Institution of Engineers, Sri Lanka (IESL), where regulators, utility engineers, renewable energy specialists, consultants, academics, and technology providers examined the emerging risks associated with modern solar and battery installations.

Industry professionals say the transformation of ordinary electricity consumers into energy producers has fundamentally changed the country’s power landscape. However, this shift has also introduced a range of technical challenges that could threaten public safety if not properly addressed.

One of the most pressing concerns involves direct current (DC) electrical faults within rooftop solar systems. Unlike conventional alternating current (AC) systems, DC faults can sustain electrical arcs for prolonged periods, significantly increasing the risk of overheating and fire outbreaks. Experts identified poor installation practices, damaged wiring, loose electrical connections, and substandard workmanship as leading causes of these incidents.

Safety specialists stress that advanced protection technologies such as Arc Fault Circuit Interrupters (AFCIs) and Rapid Shutdown Devices (RSDs) are no longer optional additions but essential safeguards for modern solar installations. These devices can detect dangerous faults and quickly isolate affected sections of a system before they escalate into major emergencies.

Concerns were also raised about the increasing number of installations using non-compliant equipment or undergoing unauthorised modifications after commissioning. Such practices can undermine both safety and performance, creating hidden hazards that may remain undetected until a serious incident occurs.

Regulators and engineers argue that the renewable energy sector’s success should not be measured solely by the number of megawatts installed. Instead, equal emphasis must be placed on quality standards, compliance, inspection regimes, and long-term operational safety.

Public Utilities Commission of Sri Lanka officials highlighted the need for stronger technical oversight as distributed energy resources continue to expand across the country. Maintaining grid stability while ensuring public safety will require updated regulations, improved enforcement mechanisms, and greater collaboration among industry stakeholders.

Experts attending the forum delivered a clear message: technological advancement alone cannot guarantee safety. Proper engineering design, qualified installation personnel, routine maintenance, and continuous industry education remain essential pillars of a sustainable renewable energy future.

As Sri Lanka’s solar revolution gathers momentum, the challenge facing policymakers and industry leaders is ensuring that safety standards evolve as rapidly as the technologies themselves.

MP Ravi K Warns Balance-of-Payments Risks Still Threaten Economy

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By: Staff Writer

June 21, Colombo (LNW): Opposition MP Ravi Karunanayake has launched a fresh debate on Sri Lanka’s economic direction, arguing that the country’s recurring financial crises stem less from inflation and more from chronic balance-of-payments weaknesses that continue to expose the economy to instability.

In a detailed appeal to President Anura Kumara Dissanayake ahead of the scheduled 2026 review of the Monetary Policy Framework Agreement, Karunanayake called for a major shift in the way policymaker’s measure and pursue economic stability.

The former Finance Minister argues that Sri Lanka’s history tells a clear story: repeated economic collapses have been triggered by shortages of foreign exchange, reserve depletion, and excessive dependence on external financing rather than by conventional inflationary pressures alone.

According to Karunanayake, decades of currency depreciation, weak domestic savings, inadequate capital formation, and recurring balance-of-payments pressures have left the country vulnerable to shocks. He believes future monetary policy must therefore move beyond a narrow focus on consumer prices and incorporate broader indicators of economic health.

Among the changes proposed are stronger emphasis on foreign reserve accumulation, increased domestic savings, productive investment, export competitiveness, and capital formation. He also called for enhanced Central Bank accountability through regular reporting to Parliament on inflation trends, exchange-rate stability, reserve growth, and broader economic outcomes.

Karunanayake supported his argument by comparing Sri Lanka’s inflation target with those maintained by several regional and advanced economies. He noted that many countries operate with lower inflation objectives, generally ranging between 2% and 4%, while major central banks in Europe, North America, and other developed economies seek to maintain inflation close to 2%.

The common thread, he argued, is that successful economies prioritize predictable and stable inflation while maintaining confidence in their currencies. Such credibility encourages savings, attracts investment, and supports sustainable economic growth.

A key concern highlighted in the letter is the risk of policymakers tolerating relatively high inflation while economic activity remains subdued. Karunanayake warned that such an approach could create a damaging scenario where growth stagnates but living costs continue to rise, leaving households under increasing financial pressure.

He argued that Sri Lanka’s inflation is often driven by factors beyond domestic demand, including imported fuel prices, supply-chain disruptions, tax changes, utility tariff adjustments, and movements in global commodity markets. These influences, he suggested, require a more comprehensive policy response than interest-rate adjustments alone.

As the October 2026 review approaches, Karunanayake is urging authorities to seize what he describes as a strategic opportunity to redesign the country’s monetary architecture. His recommendations include lowering the inflation target to between 2% and 3%, narrowing the tolerance band around that target, and formally recognizing Sri Lanka’s historic exposure to balance-of-payments crises.

The debate now centers on whether policymakers will embrace a broader framework that prioritizes long-term currency strength and economic resilience alongside inflation control—an issue likely to shape Sri Lanka’s economic trajectory for years to come.

Export Dollar Rule Tightening Raises Fresh Market Concerns

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By: Staff Writer

June 21, Colombo (LNW): A decision by the Committee on Public Finance (COPF) to approve stricter foreign exchange regulations has triggered debate over their potential impact on market confidence, as lawmakers warned that the measures could add pressure to Sri Lanka’s currency market.

The regulations, titled the “Repatriation of Export Proceeds into Sri Lanka Rules No. 2 of 2026,” were approved by COPF after extensive discussions with Central Bank officials. Published under Extraordinary Gazette Notification No. 2492/10, the rules significantly shorten the time exporters have to convert foreign currency earnings into Sri Lankan rupees.

Under the amended framework, exporters who bring export proceeds into the country during a given month must use those funds only for approved transactions. Any remaining foreign currency balances must be converted into rupees by the 10th day of the following month.

The requirement marks a major shift from regulations introduced in 2024, which allowed exporters up to three months to convert retained foreign currency holdings.

Central Bank officials defended the tighter timeline, telling the Committee that recent exchange rate fluctuations and periodic shortages of foreign exchange liquidity had necessitated urgent action. According to the CBSL, accelerating conversions would help improve the availability of foreign currency within the domestic financial system and support market stability.

However, several members of COPF questioned whether the move could produce unintended consequences.

Lawmakers warned that forcing exporters to convert foreign earnings more quickly could weaken investor confidence and potentially increase volatility in the foreign exchange market. Businesses operating in international markets often rely on foreign currency balances to manage payments, hedge risks and navigate fluctuating exchange rates. A shortened conversion window, they argued, may reduce operational flexibility and create uncertainty among exporters.

In response, Central Bank representatives emphasized that the measure is intended as a temporary intervention rather than a permanent policy shift. Officials assured the Committee that the restrictions would be eased once conditions in the foreign exchange market improve and liquidity pressures subside.

Beyond the export proceeds regulations, COPF also turned its attention to another issue attracting public interest the alleged financial fraud linked to NDB Bank.

Committee members reviewed technical aspects of the case, including the Central Bank’s regulatory responsibilities and oversight role. While details of the investigation remain under examination, lawmakers agreed that further discussion would be postponed until the completion of an ongoing forensic audit.

The decision signals that Parliament intends to maintain close oversight of both the banking sector and the country’s evolving foreign exchange framework.

The latest deliberations highlight the difficult balancing act confronting policymakers. On one hand, authorities are attempting to strengthen foreign exchange reserves and manage liquidity challenges. On the other, they must avoid policies that could discourage exporters, unsettle markets or weaken confidence in the regulatory environment.

As Sri Lanka continues its economic recovery, the effectiveness of these temporary controls—and their eventual withdrawal will likely be watched closely by exporters, investors and financial markets alike.

New Currency Controls Promise Stability but Raise Business Concerns

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By: Staff Writer

June 21, Colombo (LNW): Sri Lanka’s latest crackdown on foreign exchange abuse is being hailed as a major step toward protecting national reserves and strengthening financial transparency. However, while policymakers argue the reforms are essential for economic stability, businesses are warning that the tougher rules could create fresh operational challenges.

The reforms were triggered by the discovery of an alleged US$85 million foreign exchange fraud involving more than 100 shell companies that used fraudulent import transactions to transfer funds overseas. In response, regulators introduced sweeping changes aimed at tightening controls over foreign currency movements and improving accountability across the import-export sector.

One of the most significant changes requires all import-related foreign exchange transfers to undergo stricter verification procedures. Commercial banks can no longer process advance dollar payments without confirming that importers are properly registered with Sri Lanka Customs and meet all regulatory requirements.

Authorities have also introduced a real-time monitoring framework linking banking records with Customs data. Every foreign exchange transfer now receives a Unique Identification Number, while details such as the importer’s Taxpayer Identification Number (TIN), address, and banking information are automatically shared with Customs officials.

The objective is straightforward: ensure that every dollar sent abroad for imports corresponds to actual goods entering the country. Officials argue that this will eliminate opportunities for shell companies to exploit the system and remove artificial demand for foreign currency.

The Central Bank has complemented these measures with the Repatriation of Export Proceeds Rules No. 2 of 2026. The regulations shorten the period exporters may retain foreign earnings overseas before converting them into Sri Lankan rupees.

Economists believe these combined actions could significantly improve foreign exchange liquidity. By curbing fraudulent outflows and accelerating the return of export earnings, authorities expect increased dollar availability within the domestic banking system. This, in turn, is expected to support the stability and appreciation of the Sri Lankan rupee.

The reforms may also provide broader institutional benefits. Stronger anti-money laundering provisions and tighter transaction monitoring are likely to enhance Sri Lanka’s credibility among international investors and multilateral lenders, including the International Monetary Fund (IMF). Mandatory integration of Taxpayer Identification Numbers could further strengthen tax compliance and broaden the government’s revenue base.

Hitherto the transition is not without criticism. Many legitimate importers fear that additional verification requirements will lengthen approval processes and increase administrative burdens. Businesses that rely on rapid procurement cycles may face delays due to mandatory Customs registrations and enhanced banking scrutiny.

Exporters have also expressed concern that reduced timelines for repatriating foreign earnings may limit financial flexibility, particularly for companies managing international operations and fluctuating currency exposures.

While most stakeholders acknowledge the need for stronger safeguards, they caution that implementation must strike a balance between regulation and efficiency. The challenge for policymakers will be ensuring that efforts to protect national reserves do not unintentionally hinder legitimate trade and business activity.

As Sri Lanka tightens its financial defenses, the economy now faces the task of adapting to a more regulated environment—one designed to prevent abuse but likely to bring short-term administrative pressures for compliant businesses.

Cardinal’s Political Meddling in Easter Attack Investigations Undermines the Church

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By Adolf

The Cardinal has earned a tarnished reputation through his persistent interference in the Easter Sunday attack investigations across multiple governments. Allegations now surface that he possessed prior knowledge of the attacks—a charge that further damages his standing. His political dabbling, spanning from Mahinda Rajapaksa to Gotabaya Rajapaksa to Maithripala Sirisena and now Anura Kumara Dissanayake, has left a distinctly bitter taste among the public. Alongside his associates like Cyril Gamini, he conducts press conferences making dramatic claims and celebrating arrests with visible jubilation. This behaviour is unbecoming of a religious leader.

A Pattern of Political Interference

His direct involvement in first supporting Gotabaya Rajapaksa and now Anura Kumara Dissanayake stands in total contradiction to what Sri Lankans expect from a spiritual figure. Religious leaders are meant to guide, unify, and offer moral clarity—not engage in partisan politics or grandstand during national tragedies. When he and his associates rejoice at arrests, they treat a national calamity as a theatrical spectacle. The families of victims deserve justice, not political theatre. The Cardinal’s press conferences increasingly resemble political rallies rather than pastoral guidance. Recent public challenges by Ali Sabry PC have brought this issue to the forefront. The Cardinal’s insistence on a second FBI investigation—after the FBI itself declined to pursue one—raises troubling questions. If the world’s premier investigative agency saw no need for further inquiry, why did the Cardinal demand one? Was the objective genuine justice, or was it to target specific individuals for political purposes?

Loss of Moral Authority

A religious leader’s moral authority depends on maintaining distance from partisan politics. The Cardinal has abandoned this fundamental principle. His alliances, statements, and public conduct increasingly reflect political calculation rather than spiritual guidance. The public watches with growing disillusionment as a man who should represent compassion and unity instead fuels division and suspicion. His continuous involvement in political matters has eroded trust in the Catholic Church’s leadership in Sri Lanka.

Time for Renewal

The Cardinal is well past retirement age. His continued tenure only perpetuates the controversy surrounding his office. The Catholic community in Sri Lanka deserves a leader who can restore dignity to the institution—not one who compounds its challenges through political entanglements. It would serve Pope Leo and the global Church well to appoint a fresh face to lead Sri Lanka’s Catholic community. New leadership could rebuild bridges, restore credibility, and refocus the Church on its spiritual mission rather than political posturing.

The Way Forward

The Catholic Church remains a respected institution in Sri Lanka, its moral authority built over generations. That credibility should not be jeopardized by the political ambitions of one individual. The Cardinal’s recent actions have exposed the Church to ridicule and slander—a fallout that could have been avoided through prudence and restraint. What Sri Lanka needs—and what the Catholic community deserves—is a leader who pursues justice without spectacle, fosters unity without division, and offers spiritual guidance without political calculation. The time for renewal is overdue.The Cardinal’s legacy will ultimately be defined not by press conferences or political alliances, but by whether he chooses to step aside gracefully and allow the Church to heal. For the sake of the faithful and the nation, that step cannot come too soon. The Easter Sunday tragedy should unite all Sri Lankans in the shared pursuit of truth and justice. That goal is best served when investigations proceed independently—free from political interference, public posturing, institutional pressure, and the Cardinal’s leveraging of the proposed Papal Visit as a bargaining chip. Justice must rest on evidence, not on personalities.

Dengue Threat Escalates as More Regions Enter High-Risk Category

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June 21, Colombo (LNW): Health authorities have raised concerns over the worsening dengue situation across Sri Lanka, with the number of Medical Officer of Health (MOH) divisions considered vulnerable to a major outbreak rising to 112.

Officials monitoring the spread of the disease report that several densely populated areas are experiencing a sharp increase in infections, with the Maharagama MOH division currently recording one of the highest case loads in the country. Rapid transmission has also been observed in parts of the Kalutara and Gampaha districts, prompting intensified surveillance and control efforts.

Public health experts have identified several districts, including Colombo District, Gampaha District, Matara District, Galle District, Kandy District, Ratnapura District and Kalutara District, as the areas most severely affected by the current wave of infections.

Specialists have acknowledged that extensive mosquito-control campaigns and awareness programmes are being carried out nationwide. However, they warn that these efforts are often undermined by the failure to remove stagnant water and other mosquito breeding sites from residential and commercial premises.

Residents have been urged to dedicate time to cleaning their surroundings and inspecting their properties for potential breeding grounds, particularly in light of recent weather conditions that can accelerate mosquito population growth. Health officials caution that without greater public participation, the number of infections could rise significantly in the coming weeks.

The growing outbreak is also placing additional strain on the healthcare system. Several hospitals, particularly in heavily affected districts, are reportedly facing increasing pressure as dengue-related admissions continue to climb. Some wards have reached or are nearing full capacity, raising concerns about resource availability if case numbers continue to increase.

More than 45,000 dengue infections have been reported nationwide since the beginning of the year, marking a noticeable surge compared with previous periods. Although the latest island-wide dengue eradication campaign has officially concluded, Public Health Inspectors are expected to maintain inspections and enforcement activities in identified hotspots.

Authorities continue to emphasise that long-term control of dengue depends not only on government action but also on community responsibility. Households, businesses and institutions are being encouraged to take proactive measures to eliminate mosquito breeding sites and help curb the spread of the disease before the situation deteriorates further.