Sri Lankans, whose real incomes are getting hammered on a daily basis from soaring inflation, have reduced the use of their credit cards, as there was a slight drop in the outstanding balance of credit cards, when the financial and economic misery became more pronounced
According to the cards data, the outstanding credit card balance has come down slightly by Rs.2.19 billion to Rs.136 billion as of May –end from Rs138.19 billion in April
Sri Lanka banks introduced another hike in interest rates charged on credit cards as the Central Bank lifted administrative caps on credit card and other select loans, giving complete leeway for banks to set the prices of such loans.
Banks which initially raised their rates from 20 percent to 30 percent from May onwards in response to the April policy rate hike are now raising their rates again to the north of 40 percent as one bank yesterday announced its decision to raise cards’ interest rate by another 6 percent to 36 percent effective from July.
As uncertainty mounts and the pressure builds up again on Treasury yields on the back of the worsening economic crisis, banks are adjusting their rates to effectively prevent people from swiping their cards when the going gets tougher with runaway prices.
Other banks have also indicated that they are considering similar moves and would follow suit with sizable increases in their rates as they run a greater risk of non-performing loans from cards.
As the Monetary Board accelerated the pace of policy rate hikes since January onwards, the Central Bank in March raised the hitherto prevalent ceiling rate on credit cards from 18 percent to 20 percent only to fully remove any administrative rate caps on the collateral-free pre-approved loan facilities on April 10.
Although there was a sudden spike seen in the card balances, the steep increase in the interest rates on credit cards could make conditions worse for the cardholders, prompting them to think twice before swiping their cards.
After the Central Bank eliminated the maximum interest rate ceilings on credit cards in the third week of April to reflect the fast-rising interest rates in the economy, the banks soon raised their interest rates up to 30 percent on the cards’ outstanding balance, which came into effect from their next credit cycle.
Meanwhile, the banks are also tightening their credit standards and are declining requests for balance enhancements and requests for new cards, irrespective of the applicants’ credit standing. Some banks do not even provide reasons for the rejection of the request, a very bad practice by them.
However, the banks also face heightened credit risks from their card customers, as they confront wilful defaulters after using the entirety of the balance in the card. Credit card is a clean facility marked by a bank to its clients and no security is typically involved.
In an economic downturn in the likes of what Sri Lanka is facing today, credit cards are the last to be settled after all other loans by the borrowers. Hence, the banks face a higher risk of non-performing loans from credit cards
Sri Lankans reduce the use of credit cards in economic downturn
Marikkar questions on who is Adani’s local agent in Sri Lanka (Video)
Samagi Jana Balawega MP SM Marikkar says that it is doubtful that a copy of the letter sent by former CEB Chairman MC Ferdinando to the Finance Ministry regarding the proposed power project in Mannar will be sent to Namal Rajapaksa.
“The first paragraph of the letter sent by MMC Ferdinando to the Ministry of Finance on November 25, 2021 states that it is under the direction of the President. Then, as in the second paragraph, it says that not only the President but also the Prime Minister has given a direction. According to his letter, whether this is G to G or not, whether the Indian government said it or not is a different story, but the President and the Prime Minister have given a direction to the then Chairman of the CEB to give it to Adani. Then a copy of his letter has been sent to Namal Rajapaksa. Who is he? Is there a minister relevant to this subject? Why is this letter being copied to Namal Rajapaksa? Then who is Adani’s local agent in Sri Lanka? What is he involved in this discussion? ”
Marikkar stated this addressing a media briefing held yesterday (24).
Announcement from the Ministry of Education on conduct of schools next week
The Ministry of Education has issued an announcement regarding the conduct of schools next week.
Accordingly, schools in urban areas which were not held last week should be held for three days next week.
The limit on holding foreign currency further reduced
The Central Bank of Sri Lanka has issued a statement amending the restrictions on the holding of foreign currency.
Accordingly, the amount of foreign currency that a person living or residing in Sri Lanka can hold in his possession has been reduced from US $ 15,000 to US $ 10,000 or another equivalent.
PM dismisses media reports that he would replace the CBSL Governor
Prime Minister Ranil Wickremesinghe has dismissed media reports that he would replace the Governor of the Central Bank. According to sources, the Prime Minister has been focussed on the economic crisis at hand and had not been considering removing the Central Bank Governor.
The current tenure of Dr. N. Weerasinghe as Governor of the Central Bank ends on the 30th of June, at which point a name to replace him will be announced. However, sources close to the Prime Minister have confirmed that no discussion has been held on whether a new name will be nominated to the post. Accordingly the Prime Minister’s sole focus has been on the stabilisation of the economy.
A high level US delegation to pay an official visit to SL
A high level US delegation representing the US State Department and the Treasury Department is scheduled to pay a four day official visit to Sri Lanka, the US Embassy in Sri Lanka said.
Accordingly, they are scheduled to arrive in the country tomorrow (26).
The embassy said in a statement that the US Deputy Assistant Secretary of the Treasury for Asia and the Deputy Assistant Secretary of State for South and Central Asian Affairs were also among the delegation.
90% of essential food items will be imported from India for the next 3 months – Nalin
Trade Minister Nalin Fernando says that 90% of the country’s essential commodities will be imported from India in the next three months and that there will be no shortage of essential commodities in the market.
“We can responsibly say that we will be able to provide the people with the essential food items for the next few months. For example, we do not have a rice crisis for the next 8 months. In addition, due to the predictions made in the discussion about the food crisis, it means that this could happen in the future and when all the goods are brought home, no country in the world will be able to supply goods like that. ”
“We have the opportunity to import US $ 180 million worth of essential goods under the Indian loan scheme. Therefore, we will definitely receive about 90% of our essential goods from India within the next two to three months. ”
Trade Minister Nalin Fernando said this while participating in a program on Neth FM.
US supreme court overturns abortion rights, upending Roe v Wade
The supreme court has ruled there is no constitutional right to abortion in the United States, upending the landmark Roe v Wade case from nearly 50 years ago in a rare reversal of long-settled law that will fracture reproductive rights in America.
Joe Biden called the ruling a “tragic error” and the Republicans celebrating it “wrong, extreme and out of touch”.
The court, the president said, had pointed America down “an extreme and dangerous path”. Sounding an alarm over a concurring opinion by the conservative justice Clarence Thomas, Biden said key rights including same-sex marriage and access to contraception could now be targeted by the rightwing court.
He said: “Justice Thomas said as much today. He explicitly called to reconsider the right of marriage equality. The right of couples to make their choices on contraception.
“This is an extreme and dangerous path the court has now taken us on.”
The ruling, handed down a day after the court overturned a New York gun control law, came in the case Dobbs v Jackson Women’s Health Organization, in which the last abortion clinic in Mississippi opposed state efforts to ban abortion after 15 weeks and overturn Roe.
“We hold that Roe and Casey must be overruled,” said the majority opinion, written by Samuel Alito and joined by four other conservatives, referring also to a 1992 ruling which buttressed Roe. “The constitution makes no reference to abortion, and no such right is implicitly protected by any constitutional provision.”
Chief Justice John Roberts said he would have upheld Mississippi’s law but not overruled Roe.
The three liberal justices dissented, saying the majority opinion “says that from the very moment of fertilization, a woman has no rights to speak of”, and that conservatives well knew states would enact – and in many cases had already enacted – abortion restrictions to the moment of conception.
Under state restrictions, “a woman will have to bear her rapist’s child or a young girl her father’s – no matter if doing so will destroy her life”, the liberal justices wrote.
At least 26 states are expected to ban abortion immediately or as soon as practicable. The Republican attorney general of Texas, Ken Paxton, celebrated the ruling and said: “Abortion is illegal here.”
The Dobbs decision is one of the most consequential in generations. It will have profound, immediate and enduring consequences for tens of millions of women and other people who can become pregnant. Ripple effects could play out over decades.
“Even if it’s not completely unprecedented it’s extremely rare,” said Mary Ziegler, a visiting professor of constitutional law at Harvard Law School, professor at the University of California, Davis School of Law and a historian of abortion. “It’s also extraordinary to do something like this so quickly, with no kind of advance notice.”
A draft opinion, in which Alito laid out a caustic argument for reversing Roe v Wade, was leaked in May.
Swaths of the south and midwest are expected to ban abortion or impose severe restrictions, possibly forcing patients to travel hundreds of miles or self-manage abortions.
At least one economist has estimated such bans could result in 60,000 births a year among women unable to obtain an abortion, affecting 41% of women of reproductive age and hitting young, poor, Black and brown women and people who already have children hardest.
As Biden indicated, the decision could also herald restrictions in other areas of private life. In his opinion, Thomas explicitly encouraged fellow justices to “reconsider all of this court’s” cases that establish rights to contraception and gay marriage and sex.
Thomas did not mention interracial marriage, another right many fear could be targeted. Thomas is Black. His wife, the far-right activist Ginni Thomas, is white.
The decision is likely to spark protests and rallies, and intensify debate within and between states about abortion, and even between cities.
“Backlash to the decision is really unpredictable, and part of the reason we know that is because backlash to Roe was unpredictable,” said Ziegler.
Dr Iffath A Hoskins, president of the American College of Obstetricians and Gynecologists, said: “Today’s decision is a direct blow to bodily autonomy, reproductive health, patient safety and health equity in the United States.
“The principle of shared decision-making is founded on respect for people’s expertise in their own bodies and lives and clinicians’ expertise in science and medicine. There is no room within the sanctuary of the patient-physician relationship for individual lawmakers who wish to impose their personal religious or ideological views on others.”
Democratic-led states have enacted laws to aid patients who travel for abortions. Republican-led states have worked to further restrict abortion. Some have debated prosecuting women who seek abortions under homicide statutes.
Although an estimated 85% of Americans support legal abortion under certain circumstances, partisan manipulation of electoral districts has insulated Republican leaders from popular opinion.
Biden pointed to the midterm elections in November.
He said: “This fall, Roe is on the ballot. Personal freedoms are on the ballot. The right to privacy, liberty, equality are on the ballot.
“Until then, I will do all my power to protect a woman’s right in states where they will face the consequences of today’s decision.
“Though the court’s decision cast a dark shadow over large swaths of the land, many states still recognize a woman’s right to choose. So if a woman lives in a state that restricts abortion, the supreme court’s decision does not prevent her from traveling from her home state to the state that allows it. It does not prevent a doctor in that state from treating her.
“As the attorney general has made clear, women must remain free to travel safely to another state to seek care they need. My administration will defend that bedrock right. If any state or local official, high or low, tries to interfere with a woman exercising her basic right to travel, I will do everything in my power to fight that deeply un-American attack.”
The leak of the draft Roe decision prompted protests, some near justices’ homes. Biden called for protests to remain peaceful, saying: “No intimidation. Violence is never acceptable.”
Among Republican-led states , Missouri claimed to be first to ban abortion. South Dakota announced a special session to consider more restrictions.
In Illinois, the Democratic governor, JB Pritzker, called the general assembly into special session “to further enshrine our commitment to reproductive healthcare rights and protections”.
The US is one of only four countries since 1994 to restrict abortion, according to the Center for Reproductive Rights, the others being Poland, Nicaragua and El Salvador. This will further set America apart from peer countries as life expectancy falls. It could also damage efforts to advocate for the rights of women and girls globally.
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IMF will assist SL in line with their policies
A meeting between the representatives appointed by the International Monetary Fund for Sri Lanka and President Gotabhaya Rajapaksa was held at the President’s Residence, Fort yesterday (24) afternoon.
The delegation will stay in Sri Lanka for a week to study at length the policy and issues relevant to reaching a staff-level agreement.
They briefed the President on the discussions with economic authorities and experts, including the Prime Minister, the Ministry of Finance and the Central Bank.
The delegation stated that they look forward to assisting Sri Lanka in this difficult time in line with the policies of the International Monetary Fund.
The President elaborated on the current economic situation and thanked the delegation for their support to Sri Lanka during difficult times.
Peter Breuer, Senior Chief Operating Officer of the International Monetary Fund; Masahiro Nozaki, Chief Operating Officer; Resident Representative Dr. Tubagus Feridhanu Setyawan, Anne Marie Gulde, Deputy Director, Asia Pacific Department; Dr. C. Amarasekera, Alternative Executive Director of the International Monetary Fund, Gamini Senarath, Secretary to the President, Anura Dissanayake, Chief of Staff to the President, Dr. Nandalal Weerasinghe, Governor of the Central Bank, KMM Siriwardena, Secretary to the Finance Secretary, MSS Saman Fernando, Deputy Governor TMJYP Fernando and Director of the Economic Research Department Dr. PKG Harischandra were also present.
An Extraordinary Gazette Notification issued on Rice and Paddy
An Extraordinary Gazette Notification has been issued prohibiting the use of rice or paddy for the production of animal feed.
This gazette notification was issued by the Chairman of the Consumer Affairs Authority Shantha Niriella with effect from yesterday (24).
