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SL Banks directed to strictly follow rules on conversion of foreign exchange

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SL Banks directed to strictly follow rules on conversion of foreign exchange

The Central Bank of Sri Lanka (CBSL) has directed licensed banks to strictly adhere to the rules stipulated by the CBSL with regard to the conversion of foreign exchange proceeds of customers.

Issuing a statement today, the bank said that recent rules issued by the CBSL in respect of repatriation and conversion of export proceeds to Sri Lanka Rupees (LKR) have been misinterpreted by certain parties with vested interests.

In particular, it said that unfounded speculation has been mischievously spread that the CBSL rules require converting the entirety of workers’ remittances forcibly into LKR upon the receipt of such foreign exchange funds by the Licensed Banks.

“Rules on conversion of export proceeds DO NOT apply to workers’ remittances. Migrant workers who channel their earnings through Licensed Banks and other formal channels may hold such funds in foreign exchange at any commercial bank. Accordingly, it is NOT mandatory for Sri Lankans working abroad to convert their remittances into LKR,” the bank said.

However, the bank said that those who wish to convert those earnings into LKR would be eligible to do so while those who do so under the “Incentive Scheme on Inward Workers’ Remittances” announced by the CBSL, would receive an additional incentive of Rs. 10.00 per US dollar until 31 January 2022.

Proceeds from “services exports” are foreign exchange earnings of resident Sri Lankans who provide tourism, professional services etc. to non-residents. These services exports would be subject to the rules on conversion of the residual export proceeds after adjusting for the permitted deductions.

“In this background, it would be clear that the recent rules in respect of repatriation and conversion of export proceeds into LKR are applicable only to “exporters of goods and services” from Sri Lanka, and that the new rules require exporters to convert only the residual balance of the export proceeds into LKR after deducting the permitted payments specified in the rules.

 In fact, such permitted payments cover outward remittances in respect of current transactions, withdrawal of foreign exchange as permitted, debt servicing expenses, purchases of goods and services, and investments in Sri Lanka Development Bonds (SLDBs). 

It must also be stated that similar repatriation and conversion rules for services export proceeds are applicable in other regional countries, including India, Bangladesh, Pakistan, and Thailand, as well,” the CBSL said.

The CBSL reiterates that it would continue to facilitate the enhancement of workers’ remittances in collaboration with the Government by incentivising funds remitted through formal channels, as previously announced, while taking stern legal action against all persons (those remitting and receiving) who indulge in illegal fund transfers.

 Accordingly, the general public is requested to remain vigilant and not be misled by false information and promises.

Hambantota international Port receives Lloyd’s Register certification

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Hambantota international Port receives Lloyd’s Register certification

The Hambantota International Port (HIP), which continues to come under attack by the opposition, is heading towards a phenomenal growth in the services it offers, officials said. 

HIP top officials said.that it has received FSS certification (Fitness for Service) for their tank farm facility issued by Lloyd’s Register (LR), the World’s leading provider of classification, compliance and consultancy services to marine and offshore industries. 

This is a landmark achievement that will further strengthen the HIP brand in the maritime world.The port was awarded Lloyd’s certification, after a comprehensive approval process and an impartial third-party assessment.  

The entire process was handled by HIP’s Department of Energy Services who worked with Lloyd’s Register Marine & Offshore Asia LLP, in achieving the recognition.

Located just 10 nautical miles (19 km), from the world’s busiest maritime route linking Europe and Asia, HIP’s fully functioning tank farm facility for bunker fuel supply, provides a huge advantage to the vast number of vessels plying this route.

The high performance in bunkering volumes handled by HIP last year, underpins the potential the port has for this business.

Johnson Liu, CEO of Hambantota International Port Group (HIPG) says the recognition by a trusted International organisation like the Lloyd’s Register, will not only strengthen the confidence the international maritime community has in the port, but will also help boost Sri Lanka’s oil and gas industry.

“As we enter the new year, we are confident that we will see phenomenal growth rates not only in bunkering but also in other services offered by HIP.  

As much as we see the importance of safety protocols being maintained to the highest standards within the port, we are also confident that our efficiency in delivery continues to improve.  It is the combination of all these factors that fuel our growth,” says the CEO.

There were two phases to the oil tank refurbishment project undertaken by HIPG.  Both phases, i.e. the oil storage terminal and two oil jetties have been awarded FFS Certification by Lloyd’s.

 The storage network has 11 tanks, associated pipelines and 8 loading/unloading arms of two jetties, which are all included in the certification. 

Currently HIP has a maximum storage capacity of 51,000 m3 for Very Low Sulphur Fuel Oil (VLSFO) and 23,000 m3 for Marine Diesel Oil (MDO), held in utmost safe conditions, verified by Lloyds.

 The certification is in line with HIP’s objective of providing bunker fuels and related products that are compliant with international maritime organisation(IMO) standards.  

The IMO introduced a 0.5% m/m (mass by mass) Sulphur cap on bunkers for ships operating outside emission control areas in January 2020. With this regulation, the use of VLSFO will see a considerable increase in comparison with HSFO (High Sulphur Fuel Oil).

Sri Lanka seeks debt relief and import credit from China

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Sri Lanka seeks debt relief and import credit from China

Chinese Foreign Minister Wang Yi began his official tour of Sri Lanka on Sunday 09 seeking to advance Beijing’s ambitious Belt and Road Initiative as the island nation tries to rescue itself from a foreign currency and debt crisis, partly due to infrastructure built with Chinese loans that don’t generate revenue.

President Gotabaya Rajapaksa has extended  begging bowl seeking debt relief and import credit from China, following a meeting with visiting Chinese foreign minister Wang Yi, his office said.

Prime Minister Mahinda Rajapaksa also held discussions with the Chinese Minister on logistics of facilitating the return of the many Sri Lanka medical students to China. He further discussed a host of issues including  Tourism, investments Covid-19  relief and  post  pandemic  preparedness.

Wang arrived in Sri Lanka on Saturday from the Maldives on the last leg of a multi-city trip that also took him to Eritrea, Kenya and Comoros in Africa.

In Sri Lanka, Wang met with President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa. Later, Wang and the prime minister delivered special addresses at Colombo’s Port City, a reclaimed island developed with Chinese investment.

The visit comes as Sri Lanka faces one of its worst economic crises, with foreign reserves down to around $1.6 billion, barely enough for a few weeks of imports. 

It also has foreign debt obligations exceeding $7 billion in 2022, including repayment of bonds worth $500 million in January and $1 billion in July.

China loaned money to build a seaport and airport in the southern Hambantota district, in addition to a wide network of roads. 

But the projects have failed to make money.Central Bank figures show that current Chinese loans to Sri Lanka total around $3.38 billion not including loans to state-owned businesses, which are accounted for separately.

Sri Lanka’s President Gotabaya Rajapaksa has sought debt relief and import credit from China, following a meeting with visiting Chinese foreign minister Wang Yi, his office said.

“The President pointed out that it would be a great relief to the country if the attention could be paid on restructuring the debt repayments as a solution to the economic crisis that has arisen in the face of the Covid-19 pandemic,” a statement from the President’s media office said.

“The President also said that if a concessional trade credit scheme could be initiated for imports from China, it would enable the industries to operate smoothly.”

Sri Lanka is facing forex shortages and lost reserves due to money printed to keep interest rates down after cutting taxes in a fiscal and monetary ‘stimulus’ amid a Coronavirus pandemic.

A meeting between the Minister of Foreign Affairs of the People’s Republic of China and Member of the State Council Wang Yi, and President Gotabaya Rajapaksa was held at the Presidential Secretariat, today (09) further strengthening the 65 years of diplomatic relations between China and Sri Lanka, the PMD said.

Chinese Foreign Minister Wang Yi on Sunday held talks with Sri Lankan Prime Minister Mahinda Rajapaksa and discussed a host of issues, including promoting tourism, investments, and fight against the COVID-19 pandemic as the two countries marked the 65th anniversary of diplomatic ties.

Mr. Wang, who is also the State Councilor, arrived in Colombo on Saturday from the Maldives on a two-day visit during which he is scheduled to meet the country’s top leadership.

However, on Friday, on the eve of Mr. Wang’s visit, the Sri Lanka’s People’s Bank released $6.9 million U.S. to the Chinese company.

China’s blacklisting of the Sri Lankan bank and the public clash between officials on both sides had come amid growing concerns over an acute agriculture crisis in Sri Lanka, following President Gotabaya’s decision in May last year to abruptly switch from chemical to organic fertilisers.

The decision triggered protests from farmers who said the fertiliser ban would result in reduction in harvest, leading to a food crisis this year.

China in December suspended a project to install hybrid energy plants in three islands of Sri Lanka, citing “security concern” from a “third party”, amid reports of India raising concern over its location.

In early 2021, India lodged a “strong protest” with Lanka on the award of the tender to the Chinese company for the construction of renewable energy power plants in Delft, Nagadeepa and Analthivu.

Opposition Leader donates hospital equipment worth Rs. 2.4 million to Thelippalai Hospital

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Opposition Leader donates hospital equipment worth Rs. 2.4 million to Thelippalai Hospital

Essential hospital equipment worth Rs. 2.457,000 was donated to Thelippalai Base Hospital under the 37th phase of the Corporate Social Responsibility Project “Jana Suwaya” undertaken as part of the “Samagi Jana Balawegayen Husmak” Initiative by the Samagi Jana Balawegaya (SJB) based on a concept by Leader of the Opposition Sajith Premadasa.

The medical gear included Dialysis Machine with Portable RO System.

The event was taken place yesterday (09) in commemoration of Raja Mahendran, Founder of Capital Maharajah Group.

The “Jana Suwaya” Project together with the “Samagi Jana Balawegayen Husmak” Initiative is undertaken by the SJB’s Parliamentary Group, Organisers, Foreign Branches and is funded by local and foreign donors to relieve those affected by the Covid-19 pandemic in Sri Lanka.

Earlier, hospital equipment worth R. 106,524,000 were donated to the hospital scheme on 36 phases.

MIAP

CB releases US$ 5 Mn issued to clear essential commodities stranded at ports

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CB releases US$ 5 Mn issued to clear essential commodities stranded at ports

The long delayed clearance of over 1000 essential commodity containers struck at the Colombo port due to lack of dollars for repayments for food imports are to be cleared in a phased manner.  

The Central Bank of Sri Lanka has released US$ 5 million to clear theese containers of essential commodities stranded at the Colombo Port.

The Ministry of Trade said a total of US$ 14 million is required to release such stranded containers.

The remaining amount of funds is expected to be issued by the Central Bank by next Monday, the ministry disclosed, adding that failing which the money will be released in  a phased manner. .

The ministers recently submitted a report to the Central Bank containing details of the stranded items of importers of essential items.

It is reported that nearly a thousand containers carrying essential food items including rice, sugar, dhal and potatoes are still held at the Colombo Port due to the shortage of US dollars in the country.

At least 1300 containers of essential food commodities and other items have piled up at the Colombo Port during the past three months mostly due to the inability of obtaining bank documents on letters of credit (LCs) as a result of the dollar payment crisis and also a limited workforce at the port, importers complained.

A spokesman of the Food Importers Association said that the delay in the clearance of containers will create an artificial shortage leading to a price hike and it is essential to expedite the Customs clearance process.

Prime Minister Mahinda Rajapaksa directed the Customs and other authorities to immediately take action to release the containers of food stocks.

A top official of the Customs confirmed the delays adding that there was a backlog of a considerable number of containers at the port, and additionally the unloading operations have been stalled due to limited number of workers and staff on duty shifts.

He added that the department is following rules and regulations as well as directives of relevant authorities when clearing containers.

However the backlog seems to be reducing rapidly at present, he said, adding that there was no delay in clearing containers of milk powder and pharmaceuticals brought into the island in recent shipments.

In a letter to the Treasury, importers have urged to consider shipments in transit, prioritizing the shipments already arrived at the Colombo Port and grant approvals urgently as delayed clearance of cargo incurs demurrage continuously.

The letter also sought to consider releasing delivery orders on bank indemnity pending reference to load port/shipper as they may be unavailable to respond promptly resulting in delays in clearing cargo.

On the same lines, they requested to consider releasing delivery orders pending settlement of charges due to the inability of many importers to process cheques or payments on time and also waive storage charges and rent levied from shipping lines, consignees, importers and exporters.

The Customs official noted that a large group of small and medium scale importers had imported goods by depositing 10 percent and opening LCs and honoured the debt after selling the goods. 

The Association spokesman expressed the belief that the government will intervene and direct the Customs to release the containers struck at the port soon.

However he disclosed that there was a stock of essential food items sufficient for the country till the next month and the clearance process should be expedited without allowing some traders to restrict their wholesale market share. 

Meanwhile the Consumer Affairs Authority (CAA) has taken measures to stabilise the prices of essential (specified) commodities at reasonable levels, by provisions granted in the Consumer Affairs Authority Act No.9 of 2003.  

According to section 18 of the Act where an item is specified as an essential commodity, an importer, manufacturer or trader has to obtain the prior written approval of the Authority before increasing the price of such item.

Acting under Section 19 of the Act, the Authority can intervene in situations of “excessive pricing” and determine a Maximum Retail Price for such a commodity. Section 14 of the Act facilitates agreements on prices with manufacturers and traders.

15 items have been listed as specified essential commodities including Milk Powder – Full Cream, LPG, Wheat Flour, Cement,, Chicken Meat, White Sugar, Dried Chilies, Big Onions, Red Onions, Dhal, Dried Sprats, Gram, Green Gram, Rice and Canned Fish.

Continued assistance by India towards developing railway infrastructure in Sri Lanka : Mount Lavinia – KKS train inaugurated

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Continued assistance by India towards developing railway infrastructure in Sri Lanka : Mount Lavinia – KKS train inaugurated

A ceremony to start Mount Lavinia to Kankesanthurai Intercity services using recently received Full AC Diesel Multiple Units (AC DMUs) from India under Indian loan facility was held on 9 January 2022. Sri Lankan Minister of Transport Ms. Pavithra Wanniarachchi was the chief guest. Indian Deputy High Commissioner to Sri Lanka, Mr. Vinod K Jacob received the Minister of Transport at Colombo Fort Station.

2.       During his conversation with Minister of Transport, Deputy High Commissioner Jacob recalled the priority placed by Indian Prime Minister Narendra Modi on ties with Sri Lanka in line with the Neighborhood First policy. He said that the recent statement of External Affairs Minister Dr. S Jaishankar that India would support Sri Lanka in difficult times is an affirmation of the Neighborhood First policy in the current context. He also reiterated High Commissioner H E Gopal Baglay’s emphasis on mutually beneficial cooperation that facilitates people to people exchanges.

3.       Minister of Transport thanked Government of India for steadfast support to Sri Lanka over the years, including during the ongoing Covid-19 pandemic. Deputy High Commissioner Jacob responded that during the current year, Indian side is keen to upgrade the bilateral engagement. He said that Government of India is celebrating this year’s Pravasi Bharatiya Divas (9 January) with special focus on the youth. In this regard Deputy High Commissioner recalled the visits of Mahatma Gandhi to Sri Lanka including the seminal speech at Ananda College.

4.       Supplied by RITES under an Indian Line of Credit, these AC DMUs will help facilitate quicker travel between Western Province and Northern Province. The supply of AC DMUs is just one of the many Railway projects being undertaken by India in Sri Lanka. There are also other ongoing projects, which include supply of passenger coaches by RITES under an Indian Line of Credit. RITES has already supplied 120 of the 160 coaches under this project. Another Indian Company, IRCON is executing a project for Up-gradation of railway tracks between Maho-Anuradhapura-Omanthai.

5.       India’s total development portfolio in Sri Lanka is over USD 3.5 billion, of which around USD 570 million  are purely grant projects. Modernization of Railways and creation of new Railway infrastructure have been important sectors of focus under the Indian Government’s development portfolio in Sri Lanka, in line with the priority of the Government and people of Sri Lanka. 

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Colombo
09 January 2022

PUCSL approves controlled power cuts

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PUCSL approves controlled power cuts

The Public Utilities Commission of Sri Lanka (PUCSL) has approved the controlled power cuts set from tomorrow. These power cuts will occur for a maximum period of two hours per day, the Commission Chairman said.

In the event that the Ceylon Electricity Board (CEB) has failed to meet 100 per cent of the electricity demand of the country due to several reasons, there are already plans to cut off power by 45 minutes during the daytime and one hour at night.

The controlled power cuts will occur islandwide in several stages.

Power Minister Gamini Lokuge stated that the CEB is putting its maximum efforts on providing a continuous supply of electricity.

Revealing that the supply of coal for power generation is the main problem the CEB is facing at the moment, Lokuge added that he believes that the General Treasury will provide necessary dollars to meet the purpose.

MIAP

Port City Marina Promenade opened at China’s Foreign Minister’s participation

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Port City Marina Promenade opened at China’s Foreign Minister’s participation

The Port City Marina Promenade has been declared open today (09) at the participation of President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa and China’s Foreign Minister Wang Yi, who is in an official two-day tour in Sri Lanka marking the 65th anniversary of Sino – Sri Lankan ties.

The Port City Marina Promenade will be open to the public from tomorrow (10) between 9 am and 6 pm. The entrance is located in front of the Presidential Secretariat in Colombo.

Music Excellence Desmond De Silva passes away

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Music Excellence Desmond De Silva passes away

Music Excellence Desmond De Silva has passed away.

His demise has been confirmed as a result of a heart attack in Melbourne, Australia.

Known as a pioneer musician in Baila Music, Mr. Silva has been recognised as the ‘King of Sri Lankan Baila.’

He was 77 at the time of his death. Mr. Silva was living in Sydney, Australia.

Born in July, 1944, Silva began his career as a musician in 1963, as a member of the ‘Fire Flies.’

His breakthrough as a musical excellence was made upon many hit Baila songs such as Kirilli Ran Kirilli, Nilwan Muhudu Theere, Kendy Lamissi, Yanna Rata Wate, Sumihiri Pane and Chuda Maanike.

Unfortunately, we now have to go through a period when all the bright stars of an era are fading away.

Farewell Desmond..

CBSL suspends money-printing. Bank interest rates to be surged

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CBSL suspends money-printing. Bank interest rates to be surged

The Central Bank of Sri Lanka (CBSL) has decided to suspend the money printing operations and raise money from the market.

Following the coming of the present government Rs. 1.3 trillion were printed, which, according to critics, had contributed to the rising inflation in the country.

Meanwhile, the bank interest rates are likely to surge within this month, according to sources.

The relief package recently announced by the government requires Rs. 230 billion, part of which is to be sourced from the local money market.

MIAP

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