March 27, Colombo (LNW): Badulla District MP Chamara Sampath Dassanayake, who was taken into custody earlier today on corruption-related charges, has been granted bail following his court appearance.
The Colombo Chief Magistrate’s Court ruled in favour of bail after the MP was produced before the judiciary, hours after his arrest by the Bribery Commission.
Authorities had detained him following an inquiry into allegations of financial misconduct during his tenure in public office.
Dassanayake was reportedly taken into custody after providing a statement to the Bribery Commission earlier in the day.
March 27, Colombo (LNW): The money laundering case against Sri Lanka Podujana Peramuna (SLPP) MP Namal Rajapaksa has faced another setback as a second High Court judge has recused himself from hearing the case.
Earlier today, Colombo High Court Judge Manjula Thilakaratne announced in open court that he would withdraw from the case, citing social media posts targeting him. The case was then reassigned to High Court Judge Sujeewa Nissanka, who also recused himself shortly after.
However,Judge Thilakaratne stated that his decision was influenced by two social media posts made against him by individuals named Sanath Balasooriya and Poddala Jayantha. Following his withdrawal, the case was referred to Judge Sujeewa Nissanka, who took it up for hearing. However, Judge Nissanka also opted to withdraw from the case, leading to further delays.
As a result, the matter has now been referred to Colombo Chief High Court Judge Adithya Patabendige. The case is scheduled to be recalled on May 21, when a new judge will be appointed to continue proceedings.
The case against Namal Rajapaksa is linked to alleged money laundering in connection with the controversial ‘Krrish’ project, a large-scale real estate investment deal. The repeated recusals have raised concerns about the progress of the legal proceedings.
March 27, Colombo (LNW): The Sri Lankan government’s recent decision to reduce the purchasing rates for renewable energy has raised concerns that it may inadvertently benefit private diesel power suppliers linked to the national grid. This move has ignited widespread debate, as it threatens to deter investment in renewable energy while making costly and environmentally damaging fossil fuel-based power generation more appealing.
The reduction in tariffs for renewable energy sources such as solar and wind has created uncertainty among investors and energy producers. Many renewable energy companies had relied on stable tariffs to ensure the viability of their projects. By lowering these rates, the government risks slowing down the transition to clean energy, which is essential for energy security and sustainability.
Critics argue that this decision could favor private diesel power suppliers who provide electricity to the national grid at significantly higher rates. Diesel power is not only expensive but also contributes heavily to environmental pollution. Lowering the tariffs for renewable energy might make diesel power more financially attractive, increasing dependence on fossil fuels instead of promoting cleaner alternatives. This policy shift appears to contradict Sri Lanka’s commitments to reducing carbon emissions and advancing sustainable energy initiatives.
Industry experts caution that reducing incentives for renewable energy could discourage both local and foreign investors from entering the market. Sri Lanka possesses considerable potential for solar and wind energy, but policy inconsistencies may hinder its expansion. Investors seek regulatory stability, and sudden changes to tariff structures can deter long-term commitments. A decline in renewable energy investments could lead to energy shortages and an increased reliance on costly energy imports.
Renewable energy advocates have urged the government to reconsider its stance and restore fair pricing mechanisms for clean energy. They emphasize that fostering renewables is crucial not only for environmental protection but also for economic stability. Maintaining competitive tariffs would attract investment, create jobs, and reduce dependency on fluctuating fossil fuel markets.
Sri Lanka has previously made significant progress in renewable energy adoption, and reversing these achievements could have lasting negative consequences. The government must carefully assess the implications of its policy change to ensure alignment with both national and global sustainability objectives. Encouraging the expansion of renewable energy should be a priority to safeguard economic growth and environmental well-being.
In addition to broader concerns, the Electricity Consumers’ Association (ECA) has warned that the tariff revision for rooftop solar panels could severely impact Sri Lanka’s solar industry. With over 600 to 700 active solar panel businesses and approximately 20,000 employees in the sector, the reduction in tariffs may lead to job losses and financial instability. Many solar panel owners could struggle to repay loans and manage maintenance costs, potentially leading to the collapse of small-scale solar businesses.
ECA General Secretary Sanjeewa Dhammika expressed fears that this decision could result in a daily loss of around 250 megawatts of renewable energy that would otherwise be supplied to the national grid. He also speculated that this move might push the government toward costly emergency electricity purchases and increased reliance on liquefied natural gas (LNG), potentially raising long-term electricity prices for consumers.
When questioned, Ceylon Electricity Board (CEB) Chairperson Dr. Tilak Siyambalapitiya stated that the matter is under the jurisdiction of the Ministry and the Cabinet, as outlined in the Electricity Act. Meanwhile, Energy Minister Kumara Jayakody has yet to respond to concerns raised by stakeholders.
Under the revised policy, the payment structure for rooftop solar energy producers will change based on the system’s capacity. While the current rate is Rs. 27 per unit, the new rates will be Rs. 19 for systems generating less than 20 kilowatts (kW), Rs. 17 for systems producing between 20 kW and 100 kW, and Rs. 15 for systems generating between 100 kW and 500 kW.
This policy shift has sparked uncertainty in Sri Lanka’s renewable energy sector, with stakeholders urging the government to reconsider its decision to maintain the momentum of the country’s clean energy transition.
March 27, Colombo (LNW): Thundershowers accompanied by severe lightning are likely to occur at several places in Western, Sabaragamuwa, Southern and Uva provinces and in Kurunegala, Kandy, Nuwara-Eliya, Ampara districts, the Natural Hazards Early Warning Centre of the Department of Meteorology said in a warning today (27).
There may be temporary localised strong winds during thundershowers, the statement went on, adding that the general public is kindly requested to take adequate precautions to minimise damages caused by lightning activity.
March 27, Colombo (LNW): A three-day nationwide mosquito control initiative has been launched today (27) across eight districts identified as high-risk zones for mosquito-borne diseases, particularly dengue.
The campaign, spearheaded by the National Dengue Control Unit (NDCU), is being conducted in Colombo, Gampaha, Kalutara, Ratnapura, Batticaloa, Trincomalee, Matale, and Matara, where mosquito density has been reported to be alarmingly high.
The authorities have warned that ongoing intermittent rains have created favourable conditions for mosquito breeding, raising concerns over a potential resurgence of dengue cases.
In response to this threat, the NDCU has mobilised health teams to inspect homes, schools, workplaces, factories, places of worship, and other public areas to identify and eliminate mosquito breeding grounds.
Officials will also conduct fumigation in high-risk locations and raise awareness among residents about the importance of maintaining clean environments to prevent the spread of dengue.
Health authorities have strongly urged the public to take proactive measures by regularly clearing stagnant water and removing potential breeding sites from their premises.
Residents are encouraged to cooperate with inspection teams to ensure the success of the initiative.
This intensified mosquito control drive comes at a crucial time, as Sri Lanka has already recorded over 11,000 dengue cases since the beginning of the year. With the disease posing a serious public health threat, authorities are doubling down on efforts to prevent further outbreaks and safeguard communities.
The mosquito control programme will continue until March 29, with health officials closely monitoring its progress.
March 27, Colombo (LNW): Acting Inspector General of Police (IGP) Priyantha Weerasooriya has reaffirmed his commitment to standing by police officers who dedicate themselves to tackling organised crime in Sri Lanka.
Speaking at an awards ceremony in Colombo, Weerasooriya underscored the government’s determination to recognise and protect law enforcement personnel engaged in crime-fighting efforts.
He emphasised that officers who take risks to uphold public safety must be duly rewarded and assured of institutional backing.
“We are committed to ensuring that those who dedicate themselves to combating organised crime receive the recognition and protection they deserve,” Weerasooriya stated.
The event saw the distribution of cash prizes amounting to over 24 million rupees and commendations for 140 officers who had made significant contributions to resolving criminal cases.
The Acting IGP highlighted that these awards are part of an ongoing initiative to encourage and appreciate the hard work of police officers.
“We intend to continue motivating our officers by organising events that honour their achievements. These cash prizes are awarded following a thorough selection process,” he added, recalling that the President had earlier introduced measures to incentivise law enforcement officers.
He further noted that major raids conducted in recent months had already been rewarded, with future arrests and operations also set to receive recognition.
Addressing resource constraints within the police force, Weerasooriya acknowledged existing human resource shortages and stressed that the government had taken steps to mitigate these challenges.
He assured that officers on the frontline of crime prevention would receive both protection and rewards for their service.
“As the head of the police force, I will always stand by officers committed to this cause. Our needs have been communicated to the government regularly, and we have received positive responses from the President and the Minister,” he said.
The ceremony was attended by several high-ranking officials, including the Secretary to the Ministry of Public Security, retired Deputy Inspector General of Police Ravi Seneviratne, and other dignitaries.
This article is to provide quick comments on the irrelevance of the monetary policy statement released today as part of the Central Bank’s media activisms (Read the policy statement here).
The Monetary Policy Board (MPB) has announced of keeping its operating policy interest rates unchanged at 7.50% (Standing Deposit Facility Rate) and 8.50% (Standing Lending Facility Rate) despite the persistent deflationary trap confronted by the economy since August 2024 that requires a considerable policy rate cut to arrest the deflationary trap to return to the statutory inflation target of 5% on a quarterly basis.
The policy statement has become unusually short-cut due to the non-availability of macroeconomic facts supporting such unchanged interest rates despite the deflationary course of 6 consecutive months which the MPB predicts to continue until mid-2025 and settle in the targeted levels (i.e., 5% with a margin of 3%-7% of highly inflated economy) by end of 2025.
As such, the MPB has a considerable policy space for inflating the economy, given an underlying real interest rate of 2% or 4%. Therefore, the MPB only pursues a domestic inflation stability target in contrast to domestic price stability object stipulated in the law. In that context, the deflationary trap running around 4% at present is indicative of the meaningless model of the monetary policy.
Irrelevant Contents in the Policy Statement
Ten contents are highlighted below with a short response given under each as to why it is irrelevant or unacceptable.
1. The Board remains confident that the prevailing monetary policy stance will ensure that inflation will move towards the target of 5% while supporting the growth of the domestic economy.
This is irrelevant as the MPB or the Central Bank has no duel mandate on price stability and economic growth. Therefore, this statement comes from old writings of the previous central bank’s policy literature on all stability mandates.
2. Inflation remains negative at present mainly due to repeated reductions in electricity tariffs and fuel prices.
First, this violates the monetary policy principle adopted around the world that inflation (or deflation) is always everywhere a monetary phenomenon. Therefore, central banks have no mandates to select prices of commodities in the consumer basket and to decide policy instruments, accordingly. Their mandate is to follow up on movements of overall consumer price index and underlying headline inflation for the monetary policy targets.
Second, this statement itself is evidence for the MPB’s inability to control inflation at targets levels. If electricity and fuel prices can cause a deflation of 4% from an inflation of 2%-5% earlier while the MPB has been watchful, it is the government/fiscal policy that can practically control inflation.
Third, at the last meeting with the COPF at the Parliament, the MPB informed the COPF that the MPB was not responsible for the present deflationary trend as deflation had been caused by supply side or fiscal measures (Read the article here). This shows that the MPB has grossly violated its inflation target mandate as well as domestic price stability mandate.
3. Rupee liquidity remains at surplus level. Market interest rates have continued to decline in line with the eased monetary policy stance.
The surplus liquidity has been created by the MPB. If the liquidity is abundant, market interest rates will decline. However, the policy controversy here is that if there has been an eased monetary policy stance as stated, the economy should not confront such a deflation trap.
4. Supported by low interest rates, credit flows to the private sector remained robust.
This is an arbitrary statement without evidence. Credit flow is a result of banks and customers. Even if interest rates rise, credit tend to expand due to economic activities. As the MPB has no specific credit flow instruments, this statement is irrelevant for the monetary policy.
5. External sector performance has been more favourable than expected.
The MPB has no mandate for the external sector performances or stability. Its only mandate is to assess the factors including those of external sector performance on the inflation and take authorized policy measures independently to comply with the mandatory inflation target. Further, what was expected was not communicated in the earlier policy statement.
6. Increased net foreign purchases by the Central Bank and the receipt of the fourth tranche of the IMF-EFF programme helped increase official reserves enhancing resilience.
This is not a part of the monetary policy but the Central Bank’s normal business operations as a fiscal agent and foreign currency dealer. As the mandate of the official foreign currency reserve is not stipulated in the law, the resilience is highly questionable.
7. Risks to the inflation and growth outlook remain broadly in balance.
This is a meaningless statement copied from the US Federal Reserve. First, the MPB has no mandate for balancing the inflation and growth. It has only the domestic price stability mandate. Second, there are no statistics to establish such a balance.
8. However, the Board is watchful, among other things, of the possible impact of global trade and geopolitical uncertainties on the Sri Lankan economy.
This should be referring to Trump Trade phenomenon. It is a matter for the government and not for the MPB. The mandate of the MPB is to control inflation arising from all factors. However, the current stance of the MPB is that such conditions of inflation are supply side or non-monetary inflation which has no responsibility to the MPB. Further, Sri Lankan economy never experienced global trade and geopolitical certainty.
9. As such, monetary policy formulation will continue to be based on a forward looking and data-dependent approach.
This is not acceptable as the members of the MPB are not divine to have such a macroeconomic foresight. Not only monetary policy but also any policy public or private is data-dependent. However, monetary policy is just past-data dependent which can be interpreted for any policy decision, policy rate cut or increase or unchanged.
10. The Board stands ready to respond to emerging risks to maintaining price stability while supporting the economy to reach its potential.
This is irrelevant as the MPB has no such a duel mandate.
Concluding Remarks
As such, this policy statement is nothing but a media document attempted to show that the MPB is attending to a rocket science-like macroeconomic management policy beyond the government.
The MPB has to submit its second non-compliance report on the inflation target to the Parliament next month covering the two quatres of December 2024 and March 2025. This report similar to the last report will be of no use as COPF members will talk about some other operations of the Central Bank such as pyramid schemes and disperse happily.
In Sri Lanka, as no penalty is imposed on public authorities for non-compliance with their mandatory goals, they can continue with their public seats and remuneration while submitting theoretical policy statements. Unaccountable public service mandates are poor state governance detrimental to the economy and public.
The MPB may state that inflation will reach the target in due course or in the medium or long-term as inflation expectations are now well-anchored. However, we all will be dead in the long run as Keynes stated and, therefore, public authorities must help living standards when people live.
Therefore, it is now high time to question whether this is the monetary policy that the crisis-hit economy of Sri Lanka needs for its recovery. Such questioning is not a criminal offence.
The US new President Donald Trump urged the Federal Reserve to cut interest rates at both meetings held on 27 January and 19 March to help his domestic economic policy. He especially requested to cut interest rates at the last meeting (19 March) to help his tariff policy, given the commencement of falling commodity prices. However, the Federal Reserve kept policy rates unchanged at 4.25%-4.50% citing uncertainties around new government policies, given elevated inflation levels (Read the policy statement). Therefore, President Donald Trump is reported to be considering a change of the mandates of the Federal Reserve to be in line with the government policy priorities. It is also reported that the new Department of Government Efficiency (DOGE) headed by Elon Must who fights waste and corruption in federal agencies is planning to make an spending efficiency audit on the Federal Reserve soon. Some media reports alert a possible removal of Gerome Powell from the post of Federal Reserve Chairman.
Meantime, on March 12 the Central Bank of Canada cut its policy rate by 0.25 to 2.75% despite the expected rise in inflation above 2% target, citing its intension to prevent adverse impact of the US tariff war with Canada on consumption and business investment (Read the policy statement) and to help growth.
(This article is released in the interest of participating in the professional dialogue to find out solutions to present economic crisis confronted by the general public consequent to the global Corona pandemic, subsequent economic disruptions and shocks both local and global and policy failures. All are personal views of the author based on his research in the subject of Economics which have no intension to personally or maliciously discredit characters of any individuals.)
P Samarasiri
Former Deputy Governor, Central Bank of Sri Lanka
(Former Director of Bank Supervision, Assistant Governor, Secretary to the Monetary Board and Compliance Officer of the Central Bank, Former Chairman of the Sri Lanka Accounting and Auditing Standards Board and Credit Information Bureau, Former Chairman and Vice Chairman of the Institute of Bankers of Sri Lanka, Former Member of the Securities and Exchange Commission and Insurance Regulatory Commission and the Author of 13 Economics and Banking Books and a large number of articles published.)
March 27, Colombo (LNW): The Election Commission of Sri Lanka has officially announced the schedule for postal voting in the upcoming 2025 Local Government Elections, ensuring eligible voters have multiple opportunities to cast their ballots ahead of the main polling day.
According to the commission’s statement, postal voting will take place on April 22, 23, and 24 across all District Secretariats and designated election offices.
These arrangements cater to government employees, security personnel, and other eligible individuals who are unable to vote in person on election day due to official duties.
In an effort to maximise voter participation, additional dates have been allocated for those unable to mark their postal ballots during the initial period.
Voters who miss the primary voting window will have the chance to complete the process on April 28 and 29 at designated centres.
The Election Commission has assured that all necessary logistical and security measures will be in place to facilitate a transparent and orderly voting process.
March 27, Colombo (LNW): Badulla District MP Chamara Sampath Dassanayake, a member of the New Democratic Front (NDF), has been taken into custody by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC).
His arrest follows an inquiry into alleged financial irregularities linked to his tenure as the Chief Minister of Uva Province.
According to sources within the Bribery Commission, Dassanayake had been summoned for questioning regarding suspected misuse of public funds and administrative misconduct during his time in provincial office.
Following extensive interrogation, authorities deemed it necessary to detain him for further legal proceedings.
The investigation reportedly centres on allegations that provincial resources were misappropriated for personal or political gain, though officials have yet to disclose specific details of the accusations.
Dassanayake is set to be presented before the Colombo Magistrate’s Court, where legal proceedings will determine the next course of action.
March 27, Colombo (LNW): The Sri Lankan government has initiated the formal process to remove suspended Inspector General of Police (IGP) Deshabandu Tennakoon, following the legal framework outlined in the Removal of Officers (Procedure) Act, No. 5 of 2002, Cabinet Spokesman Minister (Dr.) Nalinda Jayathissa confirmed.
Speaking at a press briefing, Jayathissa outlined the steps required to dismiss the embattled police chief. Under the existing legislation, a motion seeking the removal of the IGP must be supported by at least 75 members of Parliament.
However, in a show of significant backing, 115 MPs have already signed the proposal, which has been formally submitted to the Speaker.
On Tuesday, a group of National People’s Power (NPP) lawmakers put forward the motion, listing 27 corruption allegations against Tennakoon.
Opposition Leader Sajith Premadasa has also lent his support, stating that the Samagi Jana Balawegaya (SJB) will back the initiative in Parliament.
Jayathissa expressed confidence that the motion would secure the necessary parliamentary approval when it is taken up for debate during the upcoming sittings on April 8 or 9. He further explained that, alongside the parliamentary vote, a special investigative committee would be appointed to examine the allegations against Tennakoon.
This committee will be formed with nominations from the Chief Justice and will include a serving Supreme Court judge, the chairman of the National Police Commission, and a senior government administrator. Their findings will be compiled into a report and submitted to Parliament for final endorsement.
In response to concerns regarding the ongoing legal proceedings surrounding Tennakoon’s appointment, the minister assured that the parliamentary process would not interfere with court hearings.
“All allegations against him will be investigated thoroughly,” Jayathissa stated, highlighting some of the most serious claims, including accusations that Tennakoon unlawfully received salaries from external institutions while serving in a government position.
He also referenced suspicions about an unlicensed distillery allegedly operated at Tennakoon’s residence, which the Criminal Investigation Department (CID) has been tasked with investigating.
Further inquiries will also be made into the suspended police chief’s international travel records, though Jayathissa noted that specific details might not be disclosed publicly due to the sensitive nature of the probe.
“There will be no selective justice,” he added, insisting that the law would be applied impartially. “No one is above the legal system, and all necessary measures will be taken to ensure accountability.”
