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
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
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.
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
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
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.
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.
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.
Sri Lanka President Gotabaya Rajapaksa has issued a New Year message as the people grapple with the worst forex crisis triggered by the island’s central bank.
The full statement is here below:
The current economic and global crises have become the biggest challenge faced by us Sri Lankans in our recent history. We should overcome this challenge with unity and better understanding. The difficulties you experienced in the face of the challenge are many. The government is taking measures to secure the normal life of the people from the current complex situation by properly understanding these challenges.
Welcoming the dawn of the Sinhala and Tamil New Year with fresh aspirations has been our much valued practice since ancient times. This time too we celebrate the dawn of the New Year with the same expectations and fresh hopes.
The genuine right of the New Year belongs to our children. I’m aware that you are sensitive about preserving this traditional spirit for the children.
I recall the sacrifices made by you, especially by the persons who are engaged in special duties, who have lost the opportunity to join their children to experience the New Year festivities as well as Sri Lankans living abroad.
I wish you all a happy, peaceful, and prosperous New Year, in which we’ll overcome present challenges.
April 12, 2022
Gotabaya Rajapaksa
On April 12, the government announced that Sri Lanka would suspend foreign debt and interest payments and that Sri Lanka would no longer be able to repay its debt. The UNP responded immediately and issued a statement to that effect. The UNP has only one seat in parliament, which is represented by the former prime minister. Neither the Samagi Jana Balawegaya, the main opposition party in the country with a larger number of parliamentary seats, nor other parties, including the Janatha Vimukthi Peramuna (JVP), was seen saying anything on the day.
Over the past few months, representatives of the opposition, including Dr. Harsha de Silva, have expressed the view that a country defaulting on its foreign debt is a simple task. They have been urging the government to stop repaying foreign loans since last January.
But former central bank governor Ajith Nivard Cabraal never took that step, and he continued to use his personal connections to raise money through hard work, seeking help from various countries. And debt servicing was continued.
He did not succumb to the popular notion of “Defaulting”. But the new Governor of the Central Bank, Nandalal Weerasinghe, instead of trying to raise money within four days of taking office, chose the easy, popular way of defaulting on loans.
What happens next?
What is emerging now is that no commercial bank in Sri Lanka will be able to obtain confirmation for its letters of credit (LC) from a globally recognized foreign bank. For example, if we are going to buy fuel, we must issue a letter of credit to our fuel supplier if that supplier requests confirmation from a bank in the United States for the relevant letter of credit we should provide it. Only then will the supplier accept the letter of credit and ship the fuel to Sri Lanka. In many import transactions in this way, suppliers require confirmation of our letter of credit from a foreign bank. But with the current situation, no commercial bank in Sri Lanka can obtain such confirmation for its letters of credit.
Accordingly, there is a risk that in the future that we will not be able to import any commodities including essential food items, medicines, fuel, and gas based on letters of credit. We will cover the situation on these letters of credit and their consequences in a separate article.
The people of this country will feel the seriousness of this only when the current political turmoil in the country subsides. It will be clear then why former Central Bank Governor Ajith Nivard Cabraal did not agree to default on the loans, despite months of pressure from the opposition.
If Ajith Nivard Cabraal has committed an offense against the law of the land, it should be dealt with separately. But debt repayment is not like that.
He went to foreign countries and continued to borrow and continued debt servicing. Now the new authorities have done something easier and worse. Only the UNP realized this immediately.
The UNP never proposed to default. Because they were aware of the serious consequences here as a political party that had previously ruled. Opposition MPs such as Dr. Harsha de Silva and Patali Champika Ranawaka, as well as economists on Facebook, who have repeatedly suggested to use the money for consumption except for default, will continue to say certain things when this completely crashes in the future.
It is especially important that the UNP pays immediate attention to this action and even comes forward to respond. Governing a country is not as easy as holding press conferences or speaking on stage. It could not be done through mere popularism at all.
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