A meeting between HRH Sheikh Mohammed Bin Maktoum Bin Juma Al Maktoum, Member of UAE Ruling Family, and President Ranil Wickremesinghe was held today (15).
The two parties exchanged views on the country’s current situation, and Prince Bin Juma Al Maktoum has expressed his support for Sri Lanka.
The two parties also discussed investments into the energy, technology and agriculture sectors in the country.
Authorities of the Réunion Island of France repatriated 46 Sri Lankan nationals to Sri Lanka by air on the evening of 13th January 2023. Reportedly, the group of Sri Lankans was apprehended as they were attempting to migrate to the Réunion Island illegally by sea.
The suspects set out aboard a multiday fishing trawler (IMUL – A- 0559 CHW) from Negombo on 02nd December 2022. The group of individuals comprises 43 males including the crew of the multiday fishing vessel, 02 females and 01 boy. They were apprehended as they were attempting to illegally enter the Réunion Island of France on 24th December 2022. They have been identified as residents of Jaffna, Kilinochchi, Mullaitivu, Mannar, Batticaloa, Chilaw and Negombo, from 13 to 53 years of age.
Meanwhile, the group of individuals will be handed over to the Criminal Investigation Department for onward legal action.
It has been revealed that the smugglers in Dehiwala area, who led this smuggling, charged an amount from Rs. 200,000 rupees to Rs. 4,500,000 from one person. Smugglers orchestrate this nature of unlawful acts with the intention of making a fast buck, by defrauding innocent people. Therefore, the Navy urges the public to avoid being victimized to such ploys and waste their hard-earned money.
The French government does not entertain the illegal entry of people to the Réunion Island and such people will be immediately repatriated upon apprehension.
SL Navy
Sri Lanka has set an ambitious target of US $1 billion monthly foreign inflow from worker remittance by end-2023 with more people leaving the island nation for offshore jobs after an unprecedented economic crisis, Foreign Employment and Labour Minister Manusha Nanayakkara said.
Workers’ remittance inflows have historically been a driving force of the Sri Lankan economy. Sri Lankan migrant workers’ foreign remittances have increased to US$ 475.6 million in December 2022 from US$ 325.2 million in December 2021, he disclosed.
He tweeted that this is a 46% (US$ 150 million) increase compared to the inflows recorded in December 2021.
However, the inflow of workers’ remittances contracted significantly in 2021 reflecting the implications of the COVID-19 pandemic and the increased tendency to remit money through informal channels.
At the same time, the external sector continues to show significant vulnerabilities making numerous challenges for the economy.
In this context, promoting workers’ remittance inflows to the country is imperative to overcome the heightened external shocks, Minister Nanyakkara added. .
Also, the importance of workers’ remittances as a steady source of foreign exchange in Sri Lanka has grown among the researchers and the policy makers
Worker remittances sent by Sri Lankan expatriates jumped 46 percent in December, but the inflows were still 31 percent down for the year after a record high number of the people migrated in 2022.
The remittances, which were the top foreign exchange earners fell from December 2021 most workers sought to send money via illegal hawala and undiyal methods in the face of the central bank kept the rupee propped up artificially.
Even after the currency was allowed to depreciate sharply from 200 rupees per dollar to 360, the worker remittances were down.
The remittances jumped 46 percent to $475.6 million in December 2022, compared to $325.2 million in the same month of the previous year.
However, the inflows fell 31 percent for the whole 2022 to $3,786.5 million from the previous year’s 5,491.5 million, the latest central bank data showed.
Though the island nation saw a record 311,269 people leaving the country as migrant workers last year, the worker remittances have yet to rise.
Sri Lanka market rates on longer-term government debt – bonds and treasury bills – are about twice as high as the high policy rates for overnight money, increasing the government’s burden in covering its budget deficit and refinancing maturing debt, several economic analysts said.
“If an appropriate downward adjustment in the market interest rates would not take place in line with the envisaged disinflation path, the central bank will be compelled to impose administrative measures to prevent any undue movements in market interest rates,” CBSL said in a statement.
The island nation has been struggling with soaring inflation, partly triggered by its worst financial crisis in seven decades and an ill-considered ban on chemical fertilisers implemented last year and since reversed.
Central Bank threatened administrative intervention to control high market interest rates that it regarded as out of line with the inflation outlook.
Any such action, interpreted by economists as meaning it might push market rates down, would lower the government’s high borrowing costs.
However, it was unclear how the central bank could force investors to support public finances at lower rates than they expected.
Well known banker, eminent economist and Board of Investment (BOI) chairman Dinesh Weerakkody said that h igh interest rates increase the cost of borrowings, reduce disposable income and thereby limit growth in consumer spending and business expansion.
When the cost of money in the form of interest rates rises rapidly, growth may slow down sharply or even give way to a contraction in the economy, with the risk of business bankruptcies.
With higher interest rates taking hold, borrowers should expect to pay more for business loans and consumers to pay more for medical loans, car loans, credit cards, and housing loans he said adding that indeed, a rising interest rate environment impacts consumers alike whether they are net borrowers or net savers – the former more than the latter.
How ever he pointed out that the positive side of high interest rates are they tend to reduce inflationary pressures and cause an appreciation in the exchange rate.
But Sri Lanka’s recent spike in inflation was largely driven by a man-made forex crisis from an artificially overvalued currency used to defend it, and thereby depleting its meagre usable foreign reserves. As a consequence we imported inflation, he claimed
The high interest rates have hit the middle and lower class right in the belly and negatively impacted the SMEs and now the organised private sector, he added.
With the instinct of all ways reversing the monetary policy after causing the damage, Governor of Central Bank Nandalal Weerasinghe disclosed recently that steps will be taken in 2023 to reduce key interest rates in Sri Lanka
Weerasinghe told media that inflation is also expected to fall in 2023 and Sri Lanka’s inflation rate eased to 57.2 per cent in December from 61 per cent in November, noting that this reflected that the policies they have taken from April 2022 were successful.
High interest rates have kept inflation down but the rates will be reduced as the economy stabilizes, he said.
Sri Lanka’s central bank in November 2022 decided to maintain the Standing Deposit Facility Rate and the Standing Lending Facility Rate at the levels of 14.50 per cent and 15.50 per cent, respectively.
Video on local media showed thick black smoke billowing from the crash site. Some bodies have been recovered from the wreckage, which an army spokesperson said had “broken into pieces”.
A plane carrying 72 people has crashed in Nepal, officials have said.
Video on local media showed thick black smoke billowing from the crash site as rescue workers and crowds gather around the wreckage of the aircraft..
It was carrying 68 passengers and four crew members, a spokesperson for the airline said. Of the passengers, 10 were foreigners while two were infants.
Ten foreigners were on board, as well as two infants, a spokesman for the airline said.
Some bodies had been recovered from the site in western Pokhara.
At least 16 people have been killed, an army spokesperson said.
“We expect to recover more bodies,” Krishna Bhandari said. “The plane has broken into pieces.”
Prime Minister Pushpa Kamal Dahal called an emergency cabinet meeting and urged security personnel and the general public to help with rescue efforts.
The twin-engine ATR 72 operated by Yeti Airlines was en route from the capital Kathmandu, the airport official said.
Plane crashes are not uncommon in Nepal, which hosts eight of the world’s 14 highest mountains including Everest, as the weather can change suddenly and make for hazardous conditions.
Last year 22 people died when a plane crashed on a mountainside.
In 2018 a US-Bangla passenger plane from Bangladesh crashed on landing in Kathmandu, killing 49 of the 71 people on board.
Sky News
Fitch Ratings has downgraded the National Long-Term Ratings of 10 Sri Lankan banks following the recent sovereign downgrade and recalibration of the agency’s Sri Lankan national rating scale.
The recalibration is to reflect changes in the relative credit worthiness among Sri Lankan issuers following Fitch’s downgrade of Sri Lanka’s Long-Term Local Currency Issuer Default Rating (IDR) to ‘CC’ from ‘CCC’/Under Criteria Observation on 1 December 2022.
Fitch typically does not assign Outlooks or apply modifiers to sovereigns with a rating of ‘CCC+’ or below.
National scale ratings are a risk ranking of issuers in a particular market designed to help local investors differentiate risk. Sri Lanka’s national scale ratings are denoted by the unique identifier ‘(lka)’.
Fitch adds this identifier to reflect the unique nature of the Sri Lankan national scale. National scales are not comparable with Fitch’s international rating scales or with other countries’ national rating scales.
The National Ratings of the Sri Lankan banks consider their creditworthiness relative to other issuers in the country.
The downgrades of the National Ratings of the 10 banks are driven by the downgrade of the sovereign’s Long-Term Local-Currency IDR and the recalibration of the national rating scale while also reflecting the relative creditworthiness among Sri Lankan issuers.
A probable default on the sovereign’s local-currency obligations increases the risk that authorities will impose restrictions on banks servicing their local-currency obligations. That said, we believe this risk is lower than non-payment by the sovereign.
The downgrade of CBL’s rating incorporates the additional consideration of parent CT Holdings PLC’s (CTH) limited ability to provide extraordinary support. This is reflected in CBL’s large size relative to the group and the bank’s weak standalone credit profile.
The Inland Revenue Commissioner General pointed out during the discussion that the amount of tax collected in the year 2022 is Rs. 860 billion and the amount of tax expected to be collected for the year 2023 is Rs. 1,667 billion in amount.
Accordingly, compared to last year, it is expected to receive more tax money amounting to 922 billion rupees this year, he said.
As Sri Lanka closes in on a $2.9 billion loan deal from the International Monetary Fund and its economy starts to stabilize, India is seeking to land ambitious long-term investments worth over $1 billion, including in the energy sector, with an eye on countering the influence of regional rival China.
Sri Lanka aims at increasing tax revenue by 69 percent to Rs.3,130 billion this year from Rs.1,852 billion in 2022 while bringing down the budget deficit to 7.9 percent in 2023 from revised 9.8 percent in 2022.
The high tax revenue target comes as millions of Sri Lankans face the impacts of the ongoing economic crisis – 66 percent inflation, job losses, and shrinking disposable income.
The largest amount which is Rs. 603 billion as expected tax revenue in 2023 is expected to receive from corporate income tax. The local revenue officials also indicated that an income of 553 billion rupees is expected from the value-added tax (VAT).
The prospect of receiving International Monetary Fund ‘Extended Fund Facility (IFF) facility in January and the first quarter of this year is vanishing as the government is still grappling to get assurance from its external creditors for debt restructuring, international analytical reports highlighted.
President Ranil Wcktreamsinghe recently revealed that IMF EFF will be further delayed till the first half of this year as the IMF board approval is unlikely in the first quarter of this year due to uncertainty of debt restructuring talks with creditors still under way.
These latest predictions have negated Central Bank Governor Nandalal Weerasinghe’s unsubstantiated statements of IMF board approval dead lines on December 22 and January 2023 exposing his non-credible utterances with hidden agenda of discrediting the present regime headed by President Ranil Wickremasinghe before the public, local analysts said.
According to Standard Chartered Bank’s latest debt elert report , IMF Executive Board approval for US$ 2.9 billion EFF slated to 2Q, negotiations with commercial creditors is likely to be pushed back to 2H and resolution to be by end-2023
The report warns achieving IMF’s qualitative and quantitative targets including timely restructuring of commercial debt could pose challenges, potentially disrupting EFF program
Opines risks remain in 2023 even after IMF board approval; politics and policy execution delays are key risks, it added.
However President Ranil Wickremesinghe, speaking on Sri Lanka’s ongoing debt restructuring program, stated that the government has already completed the negotiations with Japan – one of the three main bilateral creditors of the island nation including China and India.
President Wickremesinghe also mentioned that Sri Lanka has held discussions with China’s EXIM Bank and by now the government has commenced exchanging views in this regard.
“India’s Foreign Minister is scheduled to visit Sri Lanka on the 19th [of January] to discuss the debt restructuring process. We are proceeding with these activities gradually,” he added.
Stating that the only option Sri Lanka has left now is to seek the support of the IMF, the Head of State noted that the country cannot recover otherwise.
The International Monetary Fund (IMF) is in talks with China to try and convince the country to restructure Sri Lanka’s debt.
During a round-table media interaction, IMF Managing Director Kristalina Georgieva said that the IMF wants to help China understand both the whole issue of debt sustainability and what can be a pathway for their contribution.
Georgieva also said that the IMF is engaging with China to define a pathway for debt resolution of Chad, Zambia, and also Sri Lanka and Suriname.
Former Chairman of the State Pharmaceutical Corporation (SPC) Dr. H.M.M. Rumi has joined the Working Committee of the Samagi Jana Balawegaya (SJB).
His appointment was made by Leader of the Opposition Sajith Premadasa.
As a former SPC Chairman, Rumi made many revolutionary changes within the Corporation including making it a profit-incurring body.
As a manager and a great administrator, Dr. Rumi implemented practical solutions within the SPC, and contributed to the salary increments of the SPC employees, whilst making the process of providing medicines to the people more efficient.
Dr. Rumi holds his doctorate in Computer Technology from the National University of Technology in Ukraine.
MIAP
It is indeed a great pleasure to extend my best wishes to the Hindu devotees of Sri Lanka, on the auspicious occasion of ‘Thai Pongal’, celebrated to thank the Sun, Mother Nature and farm animals, that contributed to the bountiful harvest. This ‘Thai Pongal’ is a celebration with added significance, considering the bumper harvest of the current ‘Maha’ Season, from which the entire nation will benefit.
The ‘Pongal’ festival this year is opportune to signify the Government’s endeavours, to build a self-sufficient country by ensuring food security and nutrition for all , and reviving Sri Lanka being the Granary of the East, as established by our forefathers. Modernization of the Agriculture sector is a priority for the Government in its bid to create it as an effective, sustainable and profitable livelihood, and also serve the competitive international markets.
On this ‘Thai Pongal’ Day, which also signifies productivity and prosperity, it is imperative that we as Sri Lankans unitedly commit to contribute to the Government’s new economic and social reform program, and rebuild the country with economic affluence.
May the ‘Thai Pongal’ celebration today, bestow blessings on the country’s journey towards flourishing economic development. In keeping with the spirit and traditions of ‘Pongal’, also, may success overflow for the people of Sri Lanka to prosper.
President Ranil Wickremesinghe
