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CB Chief Nivard Cabraal moots new measures to boost forex earnings

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CB Chief Nivard Cabraal moots new measures to boost forex earnings

Central Bank Governor Ajith Nivard Cabraal has mooted new measures to boost foreign exchange earnings whilst saving scarce reserves and awaiting a positive response from the Government.

One key measure is higher duties to be imposed on about 700 items of imports which are considered non-essential.

“This will curtail demand for those imports and corresponding saving of forex as well as lead to higher revenue for the Government,” Cabraal said.adding that a new scheme of voluntary Flexi working hours and Work-from-home measures for offices is another.

“This will lead to substantial savings in energy consumption leading to savings in forex outlay for fuel for electricity generation and transport,” he added.

Previously Cabraal had suggested fuel-pump prices to be increased on the basis that such a move will ensure liquidity for the State banks, reduction of losses of CPC and general reduction of oil demand which will lead to lower forex outlay for fuel imports.

Cabraal also said solar and wind energy projects need to be fast-tracked as it will lead to lower imports of fuel in the generation of electricity while also leading to new foreign direct investments and employment.

CBSL Governor had also mooted import of vehicles to be allowed, where those are financed via inward remittances for that particular purpose, and where the import duty and other charges are also paid via new inward forex inflows.

“This will lead to substantial inflows of forex into the country, while also reducing the price of motor vehicles which has risen very sharply,” he added.

The CBSL Chief said the EPF scheme should be extended to attract new savings into the country via forex for which a special incentive is to be added upfront.

“This will make it attractive for expatriate workers to qualify for a pension and/or lump sum payment at time of retirement, while also leading to substantial non-debt creating forex inflows,” he explained.

It was also stressed that certain non-strategic and underutilised State assets be monetised. This will lead to greater economic activity as well as new non-debt forex inflows, Cabraal said, adding that these measures are in addition to many others recently introduced by the Central Bank to attract new forex inflows and retain the existing forex resources within the country.

Private sector borrowings more than doubled

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Private sector borrowings more than doubled

Private sector borrowings last year more than doubled aided by low interest rates and post-COVID return to normalcy.

As per latest provisional data released by the Central Bank, private sector borrowing in December amounted to Rs. 61 billion bringing the full year total in 2021 to Rs. 811 billion as against Rs. 374 billion in 2020.

The cumulative credit outstanding to the private sector ended as at end 2021 neared the Rs. 7 trillion mark with Rs. 6.981 trillion, up 13% from end 2020.

In 2020, credit to the private sector grew by 6.5% or Rs. 374 billion. In 2019 the growth was only 4.2% to Rs. 6 trillion.

The expansion in borrowing is due to the low interest rate regime that prevailed for most part of 2021 as well as return to normalcy post-COVID induced lockdowns.

 However, interest rates have moved up gradually in tandem with the Central Bank’s partial tightening monetary policy in August last year followed by in January this year which saw policy rates hiked by 50 basis points.

 The CBSL expressed the need for a corresponding increase in interest rates, particularly in deposit rates, thereby encouraging savings, while discouraging excessive consumption, which also fuels imports.

Future direction of monetary policy as well as interest rates will be known after the Monetary Board meeting on Thursday.

According to Wealth Trust Securities, the yield on a three-year bond maturity was seen hitting 13% for the first time since March 2017 at its secondary market trading on Friday following its auction outcome.

At the auction, the three-year maturity of 01.08.2025 recorded a weighted average of 12.25% against its pre-auction yield of 11.15/25 while the 11-year maturity of 15.01.2033 recorded a weighted average of 13.14% against its pre-auction yield of 12.90/05, Wealth Trust added.

The term of One Country – One Law task force extended by three months

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The term of One Country – One Law task force extended by three months

The term of office of the Presidential Task Force on One Country – One Law has been extended by three months. Secretary to the President Gamini Senarath has issued the relevant gazette notification on the instructions of President Gotabhaya Rajapaksa.

The term of office of the Presidential Task Force was due to end yesterday. However, it has been decided to give another three months as the responsibilities assigned to the task force are not over yet.

The Office of the President says it will seek public opinion on one law per country, covering the entire island.

I will not seek presidential pardon! – Ranjan(VIDEO)

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I will not seek presidential pardon! – Ranjan(VIDEO)

Former parliamentarian Ranjan Ramanayake has stated that he will not seek a presidential pardon.

Ranjan Ramanayake was speaking to the media while being taken back to prison after being brought to the Special Presidential Commission at the BMICH yesterday (28).

Keeping Gammanpila in the ministry of energy is a great insult to the people – Pathirana

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Keeping Gammanpila in the ministry of energy is a great insult to the people – Pathirana

Dr. Mahinda Pathirana, a theorist of the SLPP and Chairman of the Sri Lanka Press Council, says that keeping Udaya Gammanpila in the post of Minister of Energy despite such a serious crisis is the greatest insult to the people of this country.

Following is the note he posted on social media.

S.M. Ranjith’s preliminary objections rejected by court – The 8 million fuel fraud case to be heard

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S.M. Ranjith’s preliminary objections rejected by court – The 8 million fuel fraud case to be heard

The Colombo High Court yesterday (Jan. 28) rejected the preliminary objections filed by former North Central Province Chief Minister S.M. Ranjith and current Land Minister S.M. Chandrasena’s wife Shanthi Chandrasena seeking their acquittal from the charges filed by the Commission to Investigate Bribery or Corruption regarding a fuel fraud of Rs. 8 million.

That was when the case was taken up before Colombo High Court Judge Aditya Patabendige.

Earlier in the day, lawyers of S.M. Ranjith and Shanthi Chandrasena had filed preliminary objections stating that the court had no jurisdiction to hear the case as the Commission to Investigate Bribery or Corruption had violated the Code of Criminal Procedure in filing the case. Accordingly, they had requested the court to release the accused.

However, the judge rejected the initial objections yesterday and ordered the case to be heard from June 10.

When S.M. Ranjith was the Chief Minister of the North Central Province and his wife Shanthi Chandrasena, the wife of Minister S.M. Chandrasena, was his Private Secretary during the period 2012-2014. The Bribery Commission has filed a case against the private secretary for obtaining fuel worth Rs. 26,80,528.00 and Rs.53,79,623.00 through vouchers. Defendants have also been charged with inciting provincial councilors to release two vehicles in addition to their two cars and a security vehicle as the Chief Minister of the North Central Province.

PM’s Maha Shivaratri Day message

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PM’s Maha Shivaratri Day message

Prime Minister Mahinda Rajapaksa wished all Hindus a blessed Maha Shivaratri Day and wished their hopes and aspirations are fulfilled.

In his Maha Shivaratri message, the Premier said, to lead pious and enriched lives, what is important is to absorb the spirituality to each other’s lives that is taught by different faiths. For Hindus who seek meaning to their lives, Maha Shivaratri was of extreme importance, he added.

“I take this opportunity to convey my heartfelt wishes to all Hindu devotees in Sri Lanka on the occasion of celebrating Maha Shivaratri Day today. As this day is dedicated to honour Lord Shiva, Hindus mark this day with much reverence and piety.

Hindus believe that while celebrating Maha Shivaratri Day, they will be able to overcome darkness and ignorance in their lives and in the world over. The day is observed by remembering Lord Shiva by chanting prayers, fasting, meditating on ethics and virtues such as honesty, non-injury to others, charity, forgiveness and finding the goodness of Shiva.

Hence, I take this opportunity to wish all Hindus here a blessed Maha Shivaratri Day and wish that all their hopes and aspirations are fulfilled,” the Premier stated.

US signs deal with private bank to help MSMEs in Sri Lanka

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US signs deal with private bank to help MSMEs in Sri Lanka

The United States (US) has signed an agreement with a private bank to assist micro, small and medium enterprises (MSMEs) in Sri Lanka.
U.S. Ambassador Julie Chung witnessed the signing of Memorandum of Understanding (MOU) between DFCC Bank and the U.S. government’s Agency for International Development (USAID) Private Sector Development project to expand financial services to MSMEs in Sri Lanka.

“The U.S. Government shares DFCC’s belief that lending to MSMEs will increase GDP and employment during these challenging times,” said U.S. Ambassador to Sri Lanka Julie Chung. “Through powerful partnerships such as this one with DFCC Bank, we can help MSMEs increase revenues, attract investments, and create jobs – especially for women and youth.”

Through this MOU, DFCC and USAID’s Private Sector Development project will enhance financial products and services for MSMEs, strengthen digital penetration and market linkages for MSMEs, and increase access to commercial lending to MSMEs, especially to enterprises located outside of Western Province and those led by women.

Commenting on this partnership, DFCC Bank CEO Thimal Perera said, “At DFCC Bank, we are proud that many of our clients started as MSMEs and have grown with us to be large corporations and conglomerates that add value to the economy. Through this new partnership with USAID and Palladium, we look forward to increasing our capacity to empower and facilitate the robust growth and development of the MSME sector – especially women-led enterprises – in Sri Lanka.”

Established in 1955, DFCC Bank is one of the oldest development banks in South Asia. The bank has historically played a crucial role in the development of the private sector and has financed many trail-blazing start-ups that are now leading companies in Sri Lanka.
In July 2021, DFCC was awarded a USD150Mn credit line by U.S Development Finance Corporation (DFC) through which it launched DFCC Aloka to help women-led businesses benefit from several financial and non-financial services, including preferential interest rates and insurance options.
The USAID PSD project expands financing opportunities for MSMEs by facilitating financing that increases MSME competitiveness, productive employment, innovation, and market linkages. This is one component of the longstanding partnership between the U.S. and Sri Lanka to support self-reliance, strengthen stability, and promote economic growth.

ComBank appoints new Chairman and Deputy Chairman

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ComBank appoints new Chairman and Deputy Chairman

Commercial Bank PLC has announced the appointment of a new Chairman and Deputy Chairman with effect from 1 March. Current Deputy Chairman Prof. A.K.W. Jayawardane will be the new Chairman, succeeding Justice K. Sripavan who is retiring, whilst Sharham Muhseen will be the new Deputy Chairman.

Justice Sripavan was appointed Chairman on 21 December 2020 whilst he joined the Board in April 2017. Prof. Jayawardane has been a member of Commercial Bank board since April 2015 and was appointed as the Deputy Chairman in December 2020.

Jayawardane was Vice Chancellor of the University of Moratuwa until 27 November 2017 and is a Senior Professor in Civil Engineering as well as an academic of high repute. He was the Dean, Faculty of Engineering for six years at the University of Moratuwa.

He holds a PhD in Construction Management and a Master of Science Degree in Construction from the Loughborough University of Technology, UK and a BSc Eng. Degree in Civil Engineering with first class honours from the University of Moratuwa.

Also a Corporate Member, a Fellow and an International Professional Engineer of the Institution of Engineers, Sri Lanka (IESL), CEng, FIE(SL), IntPE(SL), Fellow of the National Academy of Sciences of Sri Lanka, FNAS(SL), Founder Member of the Society of Structural Engineers Sri Lanka MSSE(SL), Fellow of the Institute of Project Managers, Sri Lanka, FIPM (SL) and a life member of Sri Lanka Association for Advancement of Science.

Deputy Chairman Muhseen was appointed to the Board in February 2021. He is a senior investment banker with extensive experience in areas of Mergers and Acquisitions, Corporate Finance and Capital Markets, who has served in a senior capacity working with company boards and senior leadership teams of financial institutions across Asia to help drive their strategic corporate agenda and roadmap.

In his career spanning over 20 years in Investment Banking, he has completed landmark mergers and capital raising transactions in excess of $ 100 billion. The Asia FIG sectors team at Merrill Lynch and Credit Suisse has won the “FIG Asia House of the Year” award from the Asset magazine for several years under his leadership. Multiple transactions he led have been awarded as best country deals and best financial sector capital raise transactions.

He holds a Masters in Economics from the University of Colombo, a Bachelor of Business Administration (Hons) from Western Michigan University and has completed the Corporate Finance training program with JPMorgan in New York.

Previously Muhseen worked in best-in-class global investment banks, Credit Suisse, Bank of America Merrill Lynch and JPMorgan in leading regional coverage roles. His most immediate previous role was as Managing Director, Head of South East Asia Financial Institutions Group (FIG) and Head of Asia Insurance at Credit Suisse based in Singapore. He was an Associate Director of Deloitte.

Swiss experts to assist SL’s efforts towards organic agriculture

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Swiss experts to assist SL’s efforts towards organic agriculture

In its continuous efforts to share scientific and practical solutions in enabling a successful conversion from conventional to organic farming, A. Baur & Co. Ltd, recently facilitated a team of organic agri experts from Switzerland who revisited Sri Lanka during early-February.

The team included Prof. Christoph Studer, Professor of Natural Resources Management at the School of Agricultural, Forest and Food Sciences (HAFL), Dr. Jacques G. Fuchs, Senior Scientist in Plant Pathology and Soil Quality and Paul van den Berge, Senior Consultant from the Research Institute of Organic Agriculture (FiBL).

The revisit marks the second phase of the comprehensive study, followed by an in-depth analysis and evaluation completed in August last year when the team was on a 10-day visit conducting preliminary studies including meeting with diverse stakeholders to understand the agri ecosystem.

This time around the purpose was to further study the strategically identified potential areas based on the initial findings.

During their nine-day visit, the experts held discussions with officials from the Ministry of Agriculture to comprehend the Government’s current standing on its green agriculture policy and visited key institutions such as Rice Research & Development Institute (RRDI), Field Crop Research & Development Institute (FCRDI), Farm Mechanization Research Centre (FMRC), University of Peradeniya Faculty of Agriculture Sub Campus in Mahailluppallama as well as Tea Research Institute (TRI) to study their involvement and future initiatives steered towards this direction.

This also included discussions with officials at the Field Crop Research and Development Institute (FCRDI) and academia to explore possibilities of intercropping leguminous crops in between two paddy seasons as a sandwich crop.

The experts visited the Municipality Council of Nuwara Eliya to study the waste management process of outstation cities. The Council members led by the mayor, shared the process and experience on waste management of Nuwara Eliya city.

They also visited the largest vegetables and fruits wholesale market in Dambulla, a leading local dairy producer, a private poultry farm, and composting site in Chilaw to observe and study the availability of raw materials for organic farming input production.

As part of the collaboration of Baurs with FiBL and HAFL, Jacques Kohli who is a graduate from the Bern University of Applied Sciences is working with Baurs as an intern in carrying out a detailed study on the availability of raw materials for organic fertiliser production and their potential uses.

They also met with officials from the Sri Lanka Institute of Nanotechnology (SLINTEC), Industrial Technology Institute (ITI) and a bio fertiliser manufacturer to understand their stand on governments’ direction and seek possible collaborations, including discussions with policy makers such as Sri Lanka Standards Institute (SLSI) and National Plant Quarantine Service.

Further, they also visited Umandawa Global Buddhist Village in Kurunegala and farm fields in Dambulla and Nuwara Eliya and the Idalgashinna organic tea garden to observe and study the agri practices and ecosystem.

The experts conducted training sessions to farmers as a continuation of the trainings in their initial visit to better understand and solve issues faced by farmers in organic farming, and also initiated a knowledge sharing session for senior managers and marketing team of Baurs.

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