The problem of fuel shortage has still not been addressed and fuel queues were seen in a number of places today (14) as well. Many fuel stations reportedly did not have enough fuel and limited the amount of fuel dispensed per customer.
US$ 03 – 04 billion required from external sources. Coming year very difficult: Sabry
An amount of about US$ 03 – 04 billion could be needed for the rest of the months of 2022 and these monies should be allocated from external sources, said Finance Minister Mohammed Ali Sabry, speaking to Bloomberg.
Successful preliminary discussions have already been held with India, China, the International Monetary Fund (IMF) and the Asian Development Bank (ADB), Sabry went on, adding that he is confident that the economy would move forward.
However, the new Finance Minister confessed that following 06 – 09 months would be a very difficult period for everyone and he is fully aware of the situation.
MIAP
Musk offers to buy Twitter for $41.39bn
Billionaire Elon Musk has offered to buy Twitter for $41.39bn, a regulatory filing showed.
The Tesla CEO’s offer price of $54.20 per share represents a 38% premium to the closing price of Twitter’s stock on 1 April, the last trading day before his investment of over 9% in the company was publicly announced.
It comes just days after he rejected a seat on the social media company’s board.
Sky News
Why declare bankruptcy for $78 Million?
It was only a few days ago Former Prime Minister Ranil Wickramasinghe castigated the Central Bank for devaluing the Lankan Rupee by 40% in one day. He also noted the massive increase in Bond rates in one day was totally uncalled for, nobody asked for it he noted.
The Central Bank’s tightening up is certainly music for some economists, but for the small man, it is the last nail in the coffin. It is the bureaucrats who are burying this country, because the government is incompetent and does not have the people who can challenge the bureaucrats.
The current finance minister too does not understand economics or finance. His ministry secretary will now have a field day spinning webs around him. Now the Central Bank has declared bankruptcy for $ 78 Million.
Why do we need a Central Bank and a Finance ministry, if they can’t even strategize and plan for eventualities like -forex cash shortfalls. We don’t need a Central Bank that plays by the old rules. The world has changed by 360 degrees.
The bureaucrats responsible for the irresponsible and negligent decisions must be found out and punished. The nation and its citizens have lost 50% of their wealth in just 1 month.
Why do we need to pay million Rupee salaries to a Governor if he can’t even manage the short term funding situation. Where are his international connections? A Governor must be well connected with international networks. That is what Sri Lanka requires desperately.
Not only using the economic tools the CBSL has its disposal to tighten up. A Finance manager in a company would know declaring bankruptcy or defaulting means – end of the road . Several analysts are of the view that #nandalalweerasinghe is another #pbjayasundara in the making.
A Central Bank certainly must be independent to provide professional advice to a government, but must work within the broad parameters of government policy. Having the support of the opposition is not what a Governor needs if he is doing his job properly.
President Gotabaya Rajapakse must know that when you pray for rain you have also to deal with the mud too. That is what has happened to the President. He is walking from one crisis to another. With no end in sight. As his trusted super bureaucrat once said “only god can now save Sri Lanka.
The protestors on the streets knows this very well. That is why they want the Rajapakses to go home. They believe that there is no hope anymore under this regime. Ironically, Religious leaders too have joined this bandwagon.
Adolf
SL to receive US$ 02 billion debt from India for daily expenses
India has agreed to provide another debt of US$ 02 billion to Sri Lanka for the island nation’s daily expenses including fuel, essential food and medicines.
Earlier, India had provided a US$ 01 billion debt from which the daily expenses including fuel and food are being purchased.
‘Raban Padha’ rearranged at Galleface New Year! (VIDEO)
The anti-government protest launched on April 09 at Galleface continues for the sixth consecutive day today (14), with new elements being added in celebration of the Sinhala and Tamil New Year.
The public protest is growing ever since and demanding the stepping down of the President and the Government.
In celebration of the festive season, people have performed traditional Raban Padha songs with new lyrics implying the struggle on the ground.
MIAP
Music Legend Victor Rathnayake joins public protest (VIDEO)
Senior musician and singer Victor Rathnayake has joined the public protest at Galleface today (14).
Giving his blessings, the Sri Lankan music legend has observed the younger generations performing some of his hits.
MIAP
Sri Lanka Treasury bill rates record 25-year highs
Consequent to the Central Bank hiking policy rates on Friday, the Treasury bill weighted averages were seen skyrocketing once again as the six month and one year maturities hit highs not seen in over 25 years at its auctions yesterday.
Wealth Trust Securities said the 364 day bill increased by a staggering 767 basis points (7.67%) week on week to record a weighted average of 23.36% followed by the 182 day bill by 737 basis points (7.37%) to 22.73%. The 91 day increased by 559 basis points (5.59%) to 19.71%.
Rate change saw the weighted average rates on overnight call money and repo increasing to 14.50% each yesterday against its previous days 7.49% and 7.50%.
The 364 day bill increased by a staggering 767 basis points (7.67%) week on week to record a weighted average of 23.36% followed by the 182 day bill by 737 basis points (7.37%) to 22.73%. The 91 day increased by 559 basis points (5.59%) to 19.71%.
The total accepted volume increase to 93.71% of its total offered amount against its previous weeks 91.10% as the bid to offer ratio stood to 1.24:1.
The secondary bond market continued to remain at a standstill yesterday while in secondary bills, the 08 July maturity changed hands at levels of 14.00% to 15.50%, pre-auction.
The total secondary market Treasury bond/bill transacted volume for 08 April was Rs. 6.6 billion.
In money markets, the base rate change saw the weighted average rates on overnight call money and repo increasing to 14.50% each yesterday against its previous days 7.49% and 7.50%.
The net liquidity deficit stood at Rs. 601.62 billion yesterday as an amount of Rs. 92.65 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 13.50% against an amount of Rs. 694.27 billion withdrawn from Central Banks SLFR (Standard Deposit Facility Rate) of 14.50%.
Furthermore, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen injecting an amount of Rs. 85.00 billion by way of a 14 day reverse Repo auction at a weighted average rate of 17.00%, valued today.
New Finance Minister blames former chiefs for blocking IMF bailout
Sri Lanka ‘s new Finance Minister Ali Sabri started blaming and shaming previous fiscal and monetary authority heads of his own government for blocking the seeking of IMF aid to tackle the man-made economic disaster in the country.
He made these remarks when the time was running out for Sri Lanka to start talks with the International Monetary Fund (IMF) at its spring meetings in Washington on April 18 -24 as the country is yet to restore political stability.
Sri Lanka was blocked from going to the International Monetary Fund for assistance by the then Presidential Secretary, Central Bank Governor and Treasury Secretary, Finance Minister Ali Sabray said.
“The former Secretary to the Treasury Attigala, former governor Ajith Nivard Carbral and former president’s secretary P.B. Jayasundara did not want to go to the IMF when almost all the cabinet ministers were in favor of going,” Sabry told Sri Lanka’s Hiru Television.
“They were talking about a home grown solution instead.”je added.Senior officials have publicly opposed going to the IMF citing budget cuts and currency depreciation.
Ex-Central Bank Governor W D Lakshman, a former economics professor printed unprecedented volumes of money to run down reserves over two years and trigger over 18 percent inflation over two years under so-called Modern Monetary Theory, an extreme form of Keynesian stimulus.
Sri Lanka’s rupee depreciates due to operating a soft-peg and instability has worsened recently under flexible inflation targeting with the rupee falling from 131 to 335 since 2015
However Socio ,Political and Economic stability of a country are essential factors to reduce the risk of default on loan repayments and minimise moral hazards as most IMF lending arrangements are conditional on the member country involved agreeing to implement a set of economic policies approved by the IMF, IMF sources revealed.
Street protests which began a month ago are continuing and it has intensified recently demanding the ouster of the President.
This crisis situation triggered due to economic hardships faced by the people will have to be normalised restoring the confidence of international donor agencies, several economists said.
A new Central Bank Governor and Finance Ministry Secretary with a wide knowledge of IMF affairs have been appointed to fill the void created due to resignations of former heads of these monetary and fiscal authorities.
After a request for financial support from a member country, an IMF staff team holds discussions with the government to assess the economic situation.
Typically, a country’s government and IMF staff must then agree on a programme of economic policies to be implemented in return for a loan.
This is a long procedure and it will take at least 3-6 months to materialise, one source said adding that the government will have to initiate soon the procedure of debt restructuring with IMF mediation. It has to repay an International Sovereign US$1 billion in June this year.
The $1 billion Indian credit line and the Chinese government pledge of $2.5 billion in loans were the only hopes for Sri Lanka as its foreign reserves dropped to $1.9 billion in March from $ 2.3 billion, he added.
This situation was not sustainable, and put the government at risk of being forced to restrict imports, as well as default on external government debt repayments due to a lack of foreign currency. The loan from the IMF directly contributes to raising the country’s foreign exchange reserves at an affordable cost.
S&P lowers Sri Lanka’s sovereign rating to ‘CC’ indicating looming default
Global rating agency Standard and Poor’s (S&P) today lowered Sri Lanka’s long-term foreign currency sovereign rating from “CCC” to “CC” to reflect looming default on some affected obligations. The rating action follows the troubled Island nation’s announcement on the suspension of normal external debt servicing.
It has also lowered long-term local currency sovereign credit rating from “CCC” to “CCC-”. At the same time, it affirmed the “C” short-term rating.
The outlook on ratings was negative. It reflects the high risk to commercial debt repayment in the context of Sri Lanka’s economic, external, and fiscal pressures.