By: Staff Writer

June 11, Colombo (LNW): Sri Lanka is seeking to deepen its strategic partnership with France and the European Union as it navigates economic recovery, climate challenges, and long-term development goals. The message emerged clearly during celebrations marking the 20th anniversary of Agence Française de Développement (AFD) operations in the country, where officials outlined a vision for expanded cooperation in several critical sectors.

Addressing diplomats, development experts, and government representatives, Deputy Minister of Foreign Affairs and Foreign Employment Arun Hemachandra praised AFD’s longstanding contribution to Sri Lanka’s development journey while calling for stronger collaboration in emerging areas of national importance.

AFD first established its presence in Sri Lanka in the aftermath of the 2004 Indian Ocean tsunami, a disaster that devastated coastal communities and caused extensive economic losses. At the time, international assistance played a vital role in reconstruction efforts, and AFD became one of the agencies supporting the country’s recovery process.

Two decades later, Sri Lankan officials say the relationship has matured into a comprehensive development partnership that extends far beyond post-disaster assistance. Investments supported by AFD have touched several sectors, including water management, sanitation infrastructure, urban development, renewable energy projects, and climate adaptation initiatives.

Government representatives argue that these investments have produced tangible benefits for communities while contributing to broader national development objectives. The projects are also viewed as examples of how international partnerships can support sustainable growth in developing economies.

However, the anniversary event was not solely a celebration of past achievements. It also served as a forum for discussing future priorities. Sri Lanka continues to face multiple challenges, including climate change impacts, resource management concerns, food security pressures, and the need for sustainable economic expansion.

Officials emphasized that these issues are increasingly interconnected and require coordinated international responses. In this context, Sri Lanka appears eager to strengthen ties with partners capable of providing expertise, investment, and technical support.

Among the key areas identified for future collaboration were sustainable development, digital transformation, maritime cooperation, and institutional strengthening. Analysts note that each of these sectors aligns closely with Sri Lanka’s long-term development strategy and its efforts to improve economic competitiveness.

Digital transformation, in particular, has emerged as a priority as governments worldwide seek to modernize public services and strengthen technological infrastructure. Maritime cooperation also holds strategic significance given Sri Lanka’s location along major international shipping routes in the Indian Ocean.

Hemachandra used the occasion to express gratitude to the governments and people of France and European Union member states for their continued engagement. He also acknowledged AFD’s role in supporting projects designed to enhance resilience and improve quality of life across the country.

Looking ahead, Sri Lankan policymakers hope the next phase of cooperation will deliver even greater social and economic impact. As development priorities evolve, the partnership with France, the EU, and AFD is expected to remain a key component of the country’s efforts to achieve sustainable and inclusive growth.

For Sri Lanka, the anniversary represents not only a reflection on two decades of cooperation but also the beginning of a new chapter in international development partnerships.

By: Staff Writer

June 11, Colombo (LNW): Sri Lanka’s Central Bank has unveiled a significant regulatory adjustment that could reshape how export earnings flow through the country’s financial system, raising questions about the balance between market flexibility and currency stabilization.

The new rules require exporters to convert leftover foreign currency proceeds into Sri Lankan rupees by the 10th day of the following month after settling approved foreign currency expenses. The directive, issued through the Repatriation of Export Proceeds into Sri Lanka Rules No. 2 of 2026, amends regulations introduced two years earlier and marks the latest effort by authorities to manage foreign exchange liquidity.

The timing of the move has drawn attention across financial markets. Recent weeks have seen growing demand for US dollars, particularly from importers seeking to lock in foreign exchange ahead of future obligations. Simultaneously, exporters have been accused by some market participants of postponing conversions while waiting for a potentially weaker rupee and better exchange rates.

The resulting mismatch between dollar demand and supply has added strain to the foreign exchange market. Currency dealers reported increased volatility, with the rupee closing at Rs. 337.00/337.75 per US dollar in yesterday’s spot market trading.

Officials believe the revised rules will channel more export proceeds back into the formal banking sector, boosting liquidity and improving access to foreign exchange. By requiring exporters to convert residual balances every month, authorities hope to reduce the volume of export earnings held outside active market circulation.

The regulations continue to allow exporters substantial flexibility in meeting legitimate foreign currency requirements. Approved uses include operational expenses linked to exports, repayment of foreign currency loans, dividend distributions to non-resident shareholders, salaries for expatriate employees, overseas travel expenses related to business activities, and investments of up to 10 percent of export proceeds in government foreign currency debt securities.

Payments to indirect exporters with foreign currency commitments also remain permissible under the framework. However, any balance remaining after these transactions must be converted into rupees within the stipulated period.

The amendment’s reach extends beyond direct exporters. Indirect exporters receiving foreign currency payments from export-oriented businesses will also be subject to the same conversion requirements, broadening the regulation’s impact across supply chains.

Observers note that the policy reflects lessons learned during Sri Lanka’s economic crisis, when authorities tightened foreign exchange controls to protect reserves and support the balance of payments. At that time, exporters were required to convert proceeds within 30 days. As economic conditions improved, those restrictions were gradually eased, eventually allowing exporters to retain earnings for up to 90 days.

While the latest measure stops short of reinstating the earlier emergency-era requirement, it signals a more proactive approach to managing foreign exchange flows. Coming after consultations between the Central Bank and market participants, the move underscores the regulator’s determination to maintain stability and prevent disruptions in a market still recovering from years of economic turbulence.

By: Staff Writer

June 11, Colombo (LNW): A startling audit finding has revealed that foreign loan balances exceeding Rs. 518 billion continue to remain outside Sri Lanka’s Statement of Financial Position, exposing deeper concerns about how public borrowings are accounted for and how Government assets are reported.

The disclosure forms part of the Auditor General’s review of the Government’s 2025 Financial Statements and highlights what auditors describe as continuing weaknesses in the accounting treatment of foreign debt despite years of financial reforms and the recent restructuring of the country’s sovereign obligations.

According to the audit, loan balances amounting to Rs. 518.293 billion, representing eight categories of foreign borrowings obtained during 2022, were still being maintained outside the Government’s main financial position statement at the end of 2025. Even more significantly, no corresponding assets acquired through these loans had been identified in the Financial Statements.

Auditors warned that recording liabilities without recognising the associated assets had contributed directly to a worsening negative balance in the Government’s General Fund. The observation raises important questions about whether public assets financed through foreign borrowing have been properly documented and reflected in official accounts.

The audit also highlighted numerous inconsistencies affecting debt reporting and financial disclosures.

One notable discrepancy involved an International Sovereign Bond. Debt records maintained in the Debt Management System showed an opening balance of approximately Rs. 448 billion at the start of 2025. However, the Financial Statements reported a higher figure of nearly Rs. 452 billion, creating an unexplained difference of Rs. 3.27 billion.

Repayment figures linked to the same bond showed a similar mismatch. The Debt Management System recorded debt service payments of approximately Rs. 98.4 billion, while the Financial Statements reported repayments exceeding Rs. 101.8 billion. Once again, no explanation was provided for the difference.

Auditors also identified inconsistencies between Government records and information supplied directly by lenders. In one case, a lender confirmed an outstanding balance that was nearly $7 million lower than the amount recorded by the Government. Smaller discrepancies were also found in two additional foreign loans.

Questions were further raised about the accuracy of creditor identification. Two loans listed in the Debt Management System as having been obtained from one international lender were attributed to an entirely different institution in the Financial Statements.

The audit uncovered additional errors involving foreign currency conversions, undisclosed balance adjustments, and conflicting exchange-loss calculations. These issues stemmed partly from differences in how loan disbursements were recorded in foreign currency and local currency terms across separate reporting systems.

Taken together, the findings paint a picture of a debt-reporting framework still struggling with reconciliation, consistency, and transparency. At a time when Sri Lanka is attempting to rebuild investor confidence and strengthen fiscal governance, the Auditor General’s observations underscore the urgency of establishing more reliable and unified systems for tracking the country’s foreign debt and the assets financed through it.

By: Staff Writer

June 11, Colombo (LNW): Sri Lanka’s labour reform programme received international attention this week as senior government officials sought stronger collaboration with the International Labour Organization (ILO) to advance worker rights, social justice and workplace protections.

The discussions took place during a meeting between Labour Minister and Deputy Finance Minister Dr. Anil Jayantha Fernando and ILO Director-General Gilbert F. Houngbo on the margins of the 114th Session of the International Labour Conference in Geneva.

The engagement provided Sri Lanka with an opportunity to present its evolving labour policy framework at a time when governments worldwide are grappling with economic uncertainty, technological disruption and changing workforce expectations.

During the talks, Dr. Fernando outlined a series of reforms being pursued by the Government, including efforts to modernise labour laws, strengthen social protection systems and improve access to opportunities in an increasingly digital economy.

A major focus of the discussions was Sri Lanka’s recent ratification of ILO Convention No. 190, which addresses violence and harassment in the workplace. The convention is regarded internationally as a significant milestone in labour rights because it establishes clear obligations for governments to prevent workplace abuse and create safer working environments.

Government officials indicated that legal reforms necessary to implement the convention are already being developed, marking a crucial step from international commitment to domestic enforcement.

Another issue raised during the meeting was the potential ratification of Convention No. 188 on Work in Fishing. If adopted, the convention would strengthen protections for workers in one of Sri Lanka’s most important traditional industries. Labour advocates have long argued that fishermen and related workers require stronger safeguards covering working conditions, occupational health and social welfare benefits.

The Government’s push for labour reforms is also linked to broader economic and social objectives. Officials maintain that stronger labour standards can contribute to productivity, workforce stability and inclusive growth while enhancing Sri Lanka’s reputation among international partners and investors.

Observers say the timing of these reforms is significant. The rise of digital technologies and artificial intelligence is transforming labour markets across the globe, creating both opportunities and risks for workers. Countries are increasingly under pressure to develop policies that protect workers while remaining competitive in a rapidly changing economy.

Sri Lanka’s delegation attending the Geneva conference is expected to highlight these concerns, emphasising the need for global cooperation to ensure technological progress creates shared benefits rather than widening inequalities. The delegation is also expected to advocate for policies that help workers adapt to emerging technologies and changing employment patterns.

Houngbo responded positively to Sri Lanka’s reform efforts, acknowledging the country’s progress in embracing international labour standards. He also reaffirmed the ILO’s readiness to provide technical expertise and institutional support for future reforms.

The outcome of the Geneva discussions suggests that Sri Lanka’s labour agenda is gaining international recognition. However, the true measure of success will depend on how effectively these commitments are implemented on the ground and whether workers experience tangible improvements in their daily working lives.

June 11, Colombo (LNW): Sri Lanka’s tea industry has recorded further gains in the United Arab Emirates market, with export volumes showing steady growth amid increasing consumer demand for premium Ceylon tea across the Gulf region.

Recent trade figures indicate that tea shipments to the UAE reached more than 18 million kilogrammes during 2025, marking a notable increase compared with the previous year. Industry observers attribute the upward trend to the enduring popularity of Sri Lankan tea among consumers seeking high-quality, authentic products.

Sri Lanka’s Ambassador to the UAE, Dr Arusha Cooray, expressed confidence that exports to both the UAE and the wider Gulf Cooperation Council (GCC) region will continue to expand in the years ahead. She noted that Ceylon tea has maintained a strong reputation internationally for its distinctive flavour, stringent quality standards and rich heritage.

According to export data, Iraq remained the leading overseas buyer of Sri Lankan tea this year, accounting for the largest share of total shipments. Russia and Türkiye also ranked among the country’s top export destinations, reflecting the broad international demand for Sri Lanka’s flagship agricultural export.

The remarks were made during a special event organised by the Sri Lankan Embassy in Abu Dhabi to commemorate International Tea Day. Hosted at the Abu Dhabi Global Market, the gathering celebrated the cultural significance of tea and highlighted its contribution to Sri Lanka’s economy and export earnings.

Addressing diplomats, business leaders and industry representatives, Dr Cooray spoke about the evolution of Sri Lanka’s tea sector, from its historic origins to its present-day position as one of the world’s most recognised tea-producing nations. She also highlighted the unique characteristics of teas cultivated in the island’s diverse growing regions, each known for producing distinct flavours and aromas.

The event attracted a broad audience of government officials, trade representatives, importers, members of the diplomatic community and media personnel, underscoring the growing commercial relationship between Sri Lanka and the UAE.

The chief guest, Dr Ahmed Mukhtar, Representative of the Food and Agriculture Organization (FAO) to the UAE, praised Sri Lanka’s commitment to sustainable tea cultivation and noted that Ceylon tea continues to enjoy a competitive advantage in global markets due to its quality and consistency.

Several prominent Sri Lankan tea brands and exporters showcased a wide range of products during the exhibition, providing attendees with an opportunity to explore the diversity of the country’s tea offerings. Visitors also participated in guided tasting sessions, where experts introduced the distinctive flavour profiles associated with Sri Lanka’s renowned tea-growing districts.

Displays featuring speciality teas, value-added products and innovative tea-based beverages drew considerable interest throughout the event. The programme concluded with a networking reception that combined Sri Lankan hospitality, traditional cuisine and a selection of premium Ceylon teas.

Organisers said the celebration not only promoted Sri Lanka’s tea industry but also strengthened economic and cultural links with the UAE, a market that continues to play an increasingly important role in the country’s export strategy.