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Forex Surplus Rises as Imports Surge and Debt Repayments Loom

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August 31, Colombo (LNW): Sri Lanka recorded a surplus in its foreign exchange position in July 2025, with inflows from exports, services, and remittances exceeding import payments by a notable margin of 729 million US dollars, according to newly released official figures.

This comes despite a sharp increase in import activity fuelled by a resurgence in credit growth and rising consumer demand.

Merchandise exports reached an all-time high of 1.3 billion dollars in July, climbing from 1.14 billion in June, driven in part by exporters rushing to ship goods ahead of anticipated US trade tariffs. Remittances—still a major pillar of Sri Lanka’s foreign exchange earnings—also saw a strong uptick, rising to 690.5 million dollars from 635 million in the previous month.

The services sector recorded similar gains, with gross earnings, including tourism receipts, growing to 618 million dollars in July from 508 million in June. Tourism alone contributed 318.5 million dollars, reflecting a continued recovery in post-pandemic travel.

The surge in inflows, whilst welcome, has also spurred a rise in consumer and investment-related imports. Outbound travel expenses alone jumped to 81 million dollars in July, compared to 55 million dollars in the same month last year.

Meanwhile, demand for capital goods saw investment-related imports such as machinery and base metals reach 446.6 million dollars—levels not seen since early 2022, before the nation’s currency crisis unfolded.

July’s import spike is closely linked to a surge in private sector credit, which rose by 221 billion rupees in June. Economists note that whilst high domestic savings have traditionally buffered the economy, these savings often re-enter the system as investment spending—ultimately translating into increased demand for imported goods, particularly in sectors like construction, manufacturing, and transport.

The government, however, continues to face significant external debt obligations. In July, it paid 106.9 million dollars in interest alone, in addition to foreign investment dividends totalling 59.3 million dollars.

Observers have cautioned that the country’s current account position, though momentarily positive, remains under pressure due to upcoming debt repayments, including bilateral borrowings from India acquired during the height of the economic crisis.

Amidst these developments, there is growing unease amongst analysts about the central bank’s recent policy direction. The adoption of a unified policy rate and recent interest rate reductions have raised fears of overheating the credit market, potentially laying the groundwork for another financial imbalance.

Some economists argue that the central bank is again relying too heavily on signalling measures and liquidity injections without corresponding structural reforms—risking a return to unsustainable borrowing levels.

Further scrutiny has been directed at recent currency swap operations perceived as inflationary, with critics calling for legislative oversight. Drawing parallels with past economic failures in Sri Lanka, East Asia, and even the United States, several financial commentators have warned that deferring necessary monetary tightening could erode the hard-earned stability achieved in the wake of the country’s recent economic collapse.

Govt Moves Toward Lasting Redress for Victims of Enforced Disappearances

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August 31, Colombo (LNW): The government has reiterated its dedication to confronting the issue of enforced disappearances, pledging to pursue a path grounded in truth-seeking, justice, and sustained reparative support for affected families.

Speaking at a public awareness forum in Colombo, Minister of Transport, Highways, Ports and Civil Aviation Bimal Rathnayake underscored the necessity of establishing an independent Truth Commission. He emphasised that such a body would not only document past violations but also provide long-overdue recognition and closure to thousands of families still searching for answers.

According to the Minister, healing must be rooted in a transparent process that honours victims and holds those responsible to account.

He further noted that justice must extend beyond legal remedies to include tangible support for survivors, many of whom face economic hardship and social marginalisation. He confirmed that the Ministry of Justice, in collaboration with other state bodies, has already begun laying the groundwork to ensure such assistance is made available in a structured and dignified manner.

Minister of Justice and National Integration Harshana Nanayakkara echoed these sentiments, stating that enforced disappearances represent deliberate and grave violations of human rights, which the state can no longer afford to sideline. He acknowledged the moral and political obligation to address these wrongs openly and systematically.

As part of this initiative, the Justice Ministry is currently developing a new framework to deliver long-term reparations, aiming to replace symbolic or short-term payments with a more meaningful, sustained approach to compensation. Officials suggest the mechanism will include educational opportunities for children of the disappeared, access to mental health support, and community-based reconciliation programmes.

Overtime Rates Raised for CPR Officers as Health Ministry Aims to Recognise Frontline Contributions

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August 31, Colombo (LNW): In a move aimed at better compensating key emergency medical personnel, the Ministry of Health has introduced a significant increase in overtime payments for officers specialising in cardiopulmonary resuscitation (CPR).

The changes, formally authorised through a circular signed by Health Secretary Dr Anil Jasinghe, reflect the government’s recognition of the critical role these professionals play in life-saving interventions.

Under the revised pay structure, first-grade CPR officers will now receive Rs. 456 per hour for overtime duties—a notable rise of Rs. 151. Meanwhile, second-grade officers will see their hourly rate increased to Rs. 320, marking a Rs. 65 boost from previous figures.

The adjustments have been backdated to take effect from the 1st of April, and all outstanding arrears are expected to be paid out in the upcoming September salary cycle. The Ministry has noted that this revision comes after an internal review of compensation structures, with particular focus on high-pressure, high-responsibility roles within the public healthcare system.

By improving overtime allowances, the Ministry hopes not only to reward dedication but also to strengthen retention of experienced personnel in the sector.

Minister Vows Relentless Crackdown on Criminal Syndicates with Political Ties

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August 31, Colombo (LNW): A full-scale inquiry is currently underway into the activities of an alleged underworld figure known as ‘Kehelbaddara Padme’ and several of his close associates, according to Minister of Public Security and Parliamentary Affairs Ananda Wijepala.

Speaking to the reporters at Bandaranaike International Airport (BIA), Minister Wijepala declared that the time has come to decisively dismantle the criminal networks that have embedded themselves across the country.

He acknowledged that these syndicates had not only expanded their reach over many years, but had often operated with impunity due to the tacit approval—and at times, open support—of certain political actors.

Without naming names, the Minister criticised the culture of political patronage that allowed such groups to flourish in both rural and urban areas. He stated that it was this environment that gave rise to a deeply entrenched system of organised crime, one that preyed on vulnerable communities and obstructed legitimate governance.

“We cannot allow this cancer to spread any further,” he said. “This is a pivotal moment to restore the rule of law and reassure the public that no one, regardless of influence or affiliation, is above the law.”

Minister Wijepala went on to note that security agencies have been instructed to act without hesitation or political interference.

Government to Procure 2,000 Vehicles to Boost Local Development Access

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August 31, Colombo (LNW): The government is set to bring in a fleet of 2,000 cab vehicles early next year, aiming to strengthen the operational capacity of local government leaders across the country.

The initiative, which has been confirmed by Deputy Minister of Provincial Councils and Local Government Ruwan Senarath, is intended to improve access to remote communities and enhance the delivery of public services.

According to Minister Senarath, effective rural development hinges on the ability of officials to engage directly with communities on the ground. He noted that many heads of local institutions currently lack reliable transport, which has hampered progress in implementing infrastructure and welfare projects in outlying areas.

In support of this broader push, the Ministry has also reactivated a number of previously dormant local authorities, some of which had been non-functional for years. These restructured bodies are now spearheading small-scale but vital programmes tailored to the specific needs of their regions.

In addition, a range of new initiatives has been rolled out with a clear focus on tackling rural poverty. While details remain limited, officials have hinted at upcoming schemes designed to provide employment, improve access to clean water, and support small-scale agriculture.

Notorious Underworld Suspects Returned from Indonesia Handed Over to CID

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August 31, Colombo (LNW): Several high-ranking members of Sri Lanka’s criminal underworld have been repatriated from Indonesia and are now in the custody of local law enforcement for intensified investigations, authorities confirmed.

Amongst those transferred into the care of the Criminal Investigation Department (CID) are individuals known by the aliases ‘Kehelbaddara Padme’, ‘Commando Salintha’, and ‘Panadura Nilanga’.

Law enforcement sources revealed that these individuals are believed to be key operatives involved in a range of organised criminal activities, and are expected to face extensive questioning as part of ongoing probes into illicit operations spanning both local and international networks.

In a parallel development, two other suspects—identified as ‘Backhoe Saman’ and ‘Thembili Lahiru’—have been placed under the jurisdiction of the Crimes Division of the Western Province North.

This division will continue investigative efforts focused on the pair’s alleged involvement in a series of regional criminal enterprises, including extortion, drug trafficking, and weapons distribution.

The five men were apprehended in Indonesia as part of a coordinated international operation, and were flown back to Sri Lanka on Saturday (30) under heightened security measures.

Many districts to witness showery conditions: Sun directly over latitudes of SL (Aug 31)

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August 31, Colombo (LNW): Several spells of showers will occur in the Western and Sabaragamuwa
provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts, the Department of Meteorology said in its daily weather forecast today (31).

A few showers may occur in North-western province and in Jaffna district.

Showers or thundershowers may occur at a few places in Uva province and in Ampara and Batticaloa districts after 2.00 p.m.

Strong winds of about (40-50) kmph can be expected at times over Western slopes of the central hills and in North-central and North-western provinces and in Trincomalee and Hambantota districts.

The general public is kindly requested to take adequate precautions to minimise damages caused by strong winds.

The sun is going to be directly over the latitudes of Sri Lanka during 28th of August to 07th of September due to its apparent southward relative motion. The nearest places of Sri Lanka over which the sun is
overhead today (31) are Baththalangunduwa, Medawachchiya, Horowpotana and Kinniya about 12.10 noon.

Marine Weather:

Condition of Rain:
Showers may occur at several places in the sea areas off the coast extending from Puttalam to Matara via Colombo and Galle.

Winds:
Winds will be westerly to south-westerly and wind speed will be (30-40) kmph.

Wind speed can increase up to (50-60) kmph at times in the sea areas off the coast extending from Chilaw to Mannar via Puttalam and from Matara to Pottuvil via Hambantota.

Wind speed can increase up to 45 kmph at times in the sea areas off the coast extending from Chilaw to Matara via Colombo and Galle and from Kankasanthurai to Trincomalee via Mullaittivu.

State of Sea:
The sea areas off the coast extending from Chilaw to Mannar via Puttalam and from Matara to Pottuvil via Hambantota will be rough at times.

The sea areas off the coast extending from Chilaw to Matara via Colombo and Galle and from Kankasanthurai to Trincomalee via Mullaittivu will be fairly rough at times.

The wave height may increase about (2.5 – 3.0) m in the sea areas off the coast extending from Negombo to Pottuvil via Galle, Matara and Hambantota (this is not for land area).

Sajith as a potential President

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By Adolf

In the heated political climate of Sri Lanka, many observers tend to underestimate Sajith Premadasa. Yet, to dismiss him as an irrelevant player in the presidential race would be both premature and shortsighted. His recent leadership role in putting pressure on Anura Kumara Dissanayake (AKD) to stop political witch-hunting and focus on governance proved that he is no pushover. He has shown that he can rise to the occasion despite the odds. His performances at both presidential elections in 2019 and 2024, despite significant challenges, underscore his enduring appeal among a large segment of the population, particularly the poor and marginalized communities. Even when former President Ranil Wickremesinghe explicitly urged those unwilling to support him to cast their vote for AKD, Sajith still managed to hold his ground by securing 35%. That alone is testimony to his political resilience and the strength of his personal connection with the electorate.

Political Brand

Sajith’s political brand has always been rooted in his accessibility to the grassroots. He is not seen as a distant elite, but as a leader who engages directly with the daily struggles of ordinary Sri Lankans. His reputation for being approachable and sympathetic to the needs of the underprivileged gives him an authenticity that his rivals struggle to replicate. While AKD has gained momentum by mobilizing frustration and anger against the political establishment, Sajith represents a more familiar and compassionate figure—someone the poor feel they can trust and talk to. That human connection should not be underestimated in Sri Lankan politics, where emotional ties and perceptions of sincerity often matter as much as policy.

Issues

Furthermore, Sajith’s grasp of issues is far more nuanced than that of AKD. He has consistently demonstrated a better understanding of the economic, social, and institutional challenges the country faces. His proposals may not always have been packaged with the sharpness or populist appeal that AKD projects, but the substance is often deeper and more pragmatic. In an environment where Sri Lanka requires not just fiery rhetoric but also practical solutions, Sajith’s steadier hand may prove more credible to those seeking real outcomes rather than slogans.

Transform

However, for Sajith to transform himself into a true president-in-waiting, he must overcome his biggest weaknesses—his style of leadership and communication. He has, for too long, been held back by what many describe as his “kitchen cabinet,” an inner circle of advisers whose political instincts and strategies have repeatedly let him down. To be taken seriously as a national leader, Sajith must broaden his advisory base, embrace professionals with proven expertise, and allow more independent voices to guide him. Equally, he must reinvent the way he communicates. Too often, he appears hesitant, scripted, and almost robotic—what some critics describe as “zombie-like” communication. This undermines his otherwise genuine connection with people. In today’s media-driven political space, clarity, confidence, and presence are as important as substance. Sajith needs to project himself with vigor, conviction, and vision if he is to convince the electorate that he can not only empathize with their pain but also lead them into a better future. The political landscape in Sri Lanka is fluid, and nothing is inevitable. But one thing is clear: Sajith Premadasa cannot be written off. With sharper messaging, a stronger team, and a more confident public persona, he can still emerge as a formidable contender—and perhaps, the president-in-waiting Sri Lanka needs if AKD continues to be consumed by witch-hunting rather than development and sound governance. As Niccolò Machiavelli once wrote: “The first method for estimating the intelligence of a ruler is to look at the men he has around him

Prof. E. A. Weerasinghe, Founding Vice Chancellor of NSBM Green University, Honored as Most Visionary Leader – 2025 at the Sri Lankan Entrepreneur of the Year (SLEOTY) Awards

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Prof. E. A. Weerasinghe, the Founding Vice Chancellor of NSBM Green University, was honored with the prestigious Most Visionary Leader Award – 2025 at the Sri Lankan Entrepreneur of the Year (SLEOTY) Awards 2025 by the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL).

Prof. Weerasinghe was also conferred two Gold Awards for NSBM Green University: Gold Award in the National Extra-Large Category and Gold Award in the Western Province Extra-Large Category.

These recognitions were conferred at the Sri Lankan Entrepreneur of the Year (SLEOTY) Awards 2025, held on 29th August at Cinnamon Life. Organized annually by FCCISL, SLEOTY is regarded as Sri Lanka’s most prestigious national-level recognition for leaders who demonstrate entrepreneurial excellence in productivity, innovation, financial strength, management, employment generation, technological advancement, competitiveness, and sustainability.

Prof. Weerasinghe’s recognition as Most Visionary Leader Award – 2025 stands as a powerful tribute to his visionary leadership in bridging the critical gap in higher education opportunities in Sri Lanka. Through the establishment of NSBM Green University, he pioneered a transformative educational model that has reshaped the nation’s higher education landscape and continues to make a profound contribution to Sri Lanka’s education sector and economy.

Banks Warn of Phishing Scams as Lending Sentiment Rises amid Recovery

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Sri Lankan banks have raised fresh red flags over the growing threat of phishing scams targeting online banking users, even as a new Central Bank report shows that lending sentiment in the financial sector remains at its strongest in over a year.

In notices issued this week, several commercial banks cautioned customers about fraudulent emails and text messages containing links to counterfeit websites designed to steal personal and financial data. These fake portals, often mimicking official bank sites, use slight spelling variations or unusual characters to mislead unsuspecting users.

Banks have urged customers to remain vigilant by avoiding suspicious links, directly typing official web addresses into their browsers, and verifying URLs carefully before entering login credentials. They also stressed the importance of reporting any suspicious activity immediately.

While online security remains a pressing concern, the banking industry is experiencing renewed optimism on the lending front. According to the Central Bank of Sri Lanka’s (CBSL) latest Credit Supply Survey, the sector’s Willingness to Lend Index climbed to 59.6 in the second quarter (Q2) of 2025, the highest level in five quarters, reflecting strong economic and financial stability.

The index, a gauge of banks’ confidence in extending credit, has been supported by lower interest rates, stable liquidity positions, and rising consumer confidence. Loan demand in Q2 expanded on the back of higher wages, resumed vehicle imports, and improved business activity. Private sector borrowing surged by Rs. 221.5 billion in June alone, pushing the outstanding stock above Rs. 8.85 trillion.

Government borrowing, by contrast, was more modest at Rs. 98 billion, while credit to public corporations fell slightly. Economists say this pattern indicates that the recovery is being driven primarily by private sector demand rather than state-led borrowing.

Non-performing loans (NPLs) also eased in Q2, supported by lower interest rates, stronger collections, and flexible repayment schemes. Defaults fell across corporate and SME sectors, though retail borrowers showed slight stress due to higher living costs. CBSL expects the declining trend in NPLs to continue into Q3 as financial conditions remain favourable. Loan rejections, too, fell in Q2 as borrower quality improved, and are expected to ease further.

Despite this upbeat picture, the Central Bank cautioned that the Willingness to Lend Index may dip to 41.4 in Q3, reflecting a moderation after the recent surge. Lending to Small and Medium Enterprises (SMEs) also remains constrained. Although Government-backed concessional loan schemes and guarantees are in place, disbursement has been minimal. Officials have criticised banks for being overly cautious in extending risk capital to smaller firms, leaving them on the margins of the recovery.

The CBSL has emphasized that this cycle of credit growth is structurally different from past recoveries. Unlike earlier periods when excess liquidity was created by money printing to finance state deficits—fueling inflation and currency instability—the current surplus stems from foreign exchange purchases that boosted reserves to $6 billion by June.

Analysts say this shift, coupled with fiscal reforms and stronger central bank independence, could mark a turning point for Sri Lanka’s financial sector. However, with phishing scams on the rise and SME financing lagging, banks face a dual challenge: protecting customer trust while ensuring credit reaches all corners of the economy.