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Gold Surges Past US$3,500 to Record High Amid Fed Rate Cut Bets, Dollar Weakness

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Gold Surges Past US$3,500 to Record High Amid Fed Rate Cut Bets, Dollar Weakness

Gold prices soared to an all-time high on Tuesday (Sep 2), driven by expectations of a U.S. Federal Reserve rate cut and a weaker dollar, which boosted demand for the precious metal.

Spot gold climbed 0.3 per cent to US$3,487.55 per ounce as of 6.33am GMT (2.33pm Singapore time), after touching a record US$3,508.50 earlier in the session. U.S. gold futures for December delivery rose 1.2 per cent to US$3,557.80. So far in 2025, bullion has rallied 32 per cent.

“A weaker economic backdrop and expectations of U.S. rate cuts are boosting precious metals,” said Kyle Rodda, analyst at Capital.com. He added that a “confidence crisis in dollar assets” stemming from President Donald Trump’s criticism of the Fed has further lifted gold.

Trump has repeatedly attacked Fed Chair Jerome Powell for not cutting rates and recently criticized a costly renovation of the central bank’s Washington headquarters. He also defended his decision to fire Fed Governor Lisa Cook over alleged mortgage fraud, sparking debate over the central bank’s independence.

Markets are pricing in a 90 per cent chance of a 25-basis-point Fed rate cut on Sept 17, according to the CME FedWatch tool. Gold, which yields no interest, tends to benefit in low-rate environments.

Analysts say gold’s 2025 rally—fueled by central bank buying, geopolitical uncertainty, and global moves away from the U.S. dollar—could extend further. “Gold’s rally could extend to US$3,600 and even beyond by year-end if the Fed follows through with multiple rate cuts and if a Russia-Ukraine peace deal remains elusive,” said Tim Waterer, chief market analyst at KCM Trade.

Spot silver traded flat at US$40.64 per ounce, near its highest since 2011. Platinum rose 1 per cent to US$1,412.95, while palladium slipped 0.7 per cent to US$1,129.52.

PM Harini Amarasuriya Calls for Digital and Innovative Solutions in Agriculture at ISAE 2025

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PM Harini Amarasuriya Calls for Digital and Innovative Solutions in Agriculture at ISAE 2025

Prime Minister Dr. Harini Amarasuriya emphasized the need to enhance the quality of Sri Lanka’s agricultural sector through the adoption of digital and innovative technologies.

She made these remarks at the International Symposium on Agriculture and Environment 2025 (ISAE), organized by the Faculty of Agriculture, University of Ruhuna, and held on 2nd September 2025 at the Galle Face Hotel, Colombo, according to the Prime Minister’s Media Division.

The symposium, themed “Driving Innovations in Agricultural Technologies for Climate Action and Sustainability”, brought together academics, researchers, industry professionals, and policymakers to explore opportunities and challenges in global agriculture, sustainability, and the use of emerging technologies.

Highlighting the importance of youth participation, the Prime Minister said:

“The Young Graduates Forum, running alongside this symposium, is particularly inspiring. Our future depends on youth who are innovative, knowledgeable, and socially conscious. Investing in their education, skills, and leadership is investing in a climate-resilient future for Sri Lanka and beyond.”

She further stressed that agriculture is not just about food production but also about sustaining communities, the economy, and the planet. By embracing innovation, supporting vulnerable populations, and aligning policy with sustainability, Sri Lanka can turn the challenges of climate change into opportunities for growth and resilience, she added.

The event was attended by Member of Parliament Prof. L. M. Abeywickrama, Senior Prof. Buddhi Marambe, Agstar PLC Deputy Chairman Indika Gunawardhana, University of Ruhuna Vice Chancellor Senior Prof. P. A. Jayantha, Dean of the Faculty of Agriculture Senior Prof. G. Y. Jayasinghe, Dr. Awanthi Mahanama, Dr. Anushka Bandara, and students of the University of Ruhuna.

WEATHER FORECAST FOR 03 SEPTEMBER 2025

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WEATHER FORECAST FOR 03 SEPTEMBER 2025

A few showers may occur in Western and Sabaragamuwa provinces and in Galle, Matara, Kandy, and Nuwara-Eliya districts.

Showers or thundershowers may occur at a few places in Ampara and Batticaloa districts after 2.00 p.m.
Mainly fair weather will prevail elsewhere of the island.

Fairly strong winds of about (30-40) kmph can be expected at times over Western slopes of the central hills and in North-central and North-western provinces and in Hambantota district.

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 (03) are Marawila, Dampelessa, Mawathagama, Ukuwela and Kalmunei about 12.09 noon.

Political Uncertainty Clouds Sri Lanka’s Economic Gains

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Political Uncertainty Clouds Sri Lanka’s Economic Gains

By:Staff Writer

September 02, Colombo (LNW): Sri Lanka’s external sector showed surprising resilience in the first seven months of 2025, but economists warn that mounting political instability could undermine these gains and threaten economic stability.

According to the Central Bank of Sri Lanka (CBSL), the current account posted a $1.7 billion surplus between January and July 2025, a 36.5% increase from the same period last year. The improvement was driven by stronger exports, rising workers’ remittances, and steady tourism earnings. Yet, the underlying picture reveals vulnerabilities, particularly in trade and currency movements, raising concerns about sustainability in the face of fragile governance.

Merchandise trade continued to weigh heavily on the balance. Although the deficit narrowed slightly in July to $580 million compared to $603 million a year earlier, the cumulative deficit widened to $3.8 billion in the first seven months, up from $3.1 billion in 2024. Imports surged 11.8% year-on-year to $11.64 billion, outpacing the 7.1% growth in exports, which reached $7.8 billion.

The spike in imports was largely visible in June and July, with vehicle imports alone accounting for $668 million in the seven-month period. Rising import prices further worsened terms of trade, while the rupee depreciated 3.3% against the US dollar by end-August 2025. These pressures leave Sri Lanka exposed, especially as global commodity prices remain volatile.

Services and tourism provided a buffer, with net inflows in services reaching $2.4 billion, up 3.3% from last year. Tourist arrivals rose 6.6% in July to over 200,000, generating $318 million in earnings. Cumulative tourism revenue stood at $2 billion by July, slightly higher than 2024 levels. Workers’ remittances offered another lifeline, hitting $697 million in July—the highest since December 2020.

Capital market activity, however, sent mixed signals. While foreign investors maintained net inflows into government securities, the Colombo Stock Exchange saw net outflows in both primary and secondary markets, underscoring investor caution. Official reserves held steady at $6.1 billion at end-July, supported partly by the swap arrangement with China’s central bank.

Analysts caution that despite encouraging current account numbers, the economy remains vulnerable to political instability. Growing uncertainty over fiscal reforms, governance disputes, and delays in debt restructuring could shake investor confidence. The widening trade deficit, rupee depreciation, and reliance on remittances and tourism inflows further highlight structural weaknesses.

With elections looming and policy direction unclear, Sri Lanka risks losing the fragile economic stability it has built. Unless decisive reforms are pursued, the country’s external sector resilience may prove short-lived, exposing the economy to fresh turbulence.

Vehicle imports strain Sri Lanka’s foreign reserves despite stronger inflows

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Vehicle imports strain Sri Lanka’s foreign reserves despite stronger inflows

By:Staff Writer

September 02, Colombo (LNW): Sri Lanka’s ambitious target of surpassing US$7 billion in foreign exchange reserves by end-2025 faces renewed challenges, as import outflows continue to climb faster than anticipated despite healthy inflows from remittances and tourism.

According to official data, personal vehicle imports surged to US$506.1 million up to July 2025, compared with just US$34.8 million a year earlier. In addition, US$162.2 million was spent on commercial vehicles during the same period. Together, vehicles alone accounted for over US$668 million, raising concerns about unsustainable pressure on foreign exchange reserves.

Sri Lanka recorded total inflows of US$2.6 billion in July, exceeding imports by US$729 million. However, sustained high-value imports risk offsetting these gains. Personal vehicles are classified as consumer goods, often financed through credit repaid over several years, while commercial vehicles are treated as investment goods. This distinction underscores a structural issue: consumer-driven imports lock in foreign exchange outflows without corresponding productive returns.

Investment goods imports as a whole grew 22.5 percent to US$2.22 billion up to July, with building materials alone at US$569.2 million. Although this reflects renewed economic activity, parallels to 2021—when loose credit and directed lending drove building material imports to US$1.24 billion by December—raise red flags about repeating past vulnerabilities.

Meanwhile, the oil import bill dropped to US$2.25 billion up to July, compared with US$2.54 billion last year, aided by lower global oil prices and increased renewable energy generation. While this has temporarily eased pressure, analysts warn that other categories of imports—especially vehicles are offsetting these gains.

Private sector credit growth, particularly in June, was partly driven by car financing, following central bank rate cuts. Economists caution that such policy shifts may trigger reserve drawdowns to cover debt repayments and imports, undermining external stability. If inflationary policy resumes, even robust inflows from remittances (expected to cross US$6 billion in 2025) and tourism (forecast above US$4 billion) may not be enough to sustain balance.

To achieve the US$7 billion reserve target, Sri Lanka would need to maintain consistent monthly net inflows of over US$500–600 million in the remaining months of 2025. However, with rising import demand and credit-driven consumption, this looks increasingly difficult.

Analysts stress that unless imports, particularly non-essential ones like personal vehicles—are carefully managed, Sri Lanka risks missing its target. The balance between encouraging growth through investment and preventing consumer-driven outflows will be central to the country’s economic stability in the months ahead.

Delays in Justice: Systemic Causes Beyond Case Backlogs

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Delays in Justice: Systemic Causes Beyond Case Backlogs

By: Staff Writer

September 02, Colombo (LNW): The Judicial Service Commission’s (JSC) recent order directing all courts to clear their case backlogs by December 31 has placed the spotlight on a body that is often little known outside legal circles but plays a decisive role in how justice is administered in Sri Lanka. While the directive has stirred both urgency and debate across the judiciary, it also highlights the broader powers, responsibilities, and constitutional standing of the Commission in safeguarding judicial independence and ensuring efficient administration of justice.

The Current Directive: A Bold Push to End Delays

The JSC’s latest intervention is unprecedented in scale. Judges across District Courts, Magistrates’ Courts, High Courts, and even Additional District Courts have been told to prioritize the disposal of long-pending cases. Monthly progress reports are now mandatory, and the Commission has warned that accountability for success or failure rests squarely with presiding judges. Periodic inspections are to follow, and strict disciplinary action is being promised against staff who fail in their duties.

This move comes amid widespread concern that Sri Lanka’s court system, burdened with decades-old cases, risks eroding public confidence. According to the Commission’s own past reports, civil cases more than 30 years old have lingered in some jurisdictions.The December deadline, therefore, is both an administrative challenge and a symbolic effort to reassure the public that justice delayed will not remain justice denied.

What Exactly is the Judicial Service Commission?

Established under Chapter XV of the Constitution, the Judicial Service Commission is one of the country’s most powerful independent institutions. Its core mandate is to safeguard judicial independence by managing the careers and discipline of judges in the lower courts. The Commission is composed of the Chief Justice (as Chairman) and the two most senior Supreme Court judges, all appointed with the approval of the Constitutional Council.

The Commission’s responsibilities include:

– Appointments, promotions, transfers, and disciplinary control of District Judges, Magistrates, and Presidents of Labour Tribunals
– Appointment and supervision of Quazis, who handle Muslim family law matters.
– Oversight of court staff, including registrars, interpreters, and clerical officers.
– Administration of judicial affairs, ensuring that the machinery of justice operates efficiently across the island.

In practice, this makes the JSC the nerve centre of Sri Lanka’s judicial administration, bridging constitutional independence with operational control.

Guardians of Independence

A crucial aspect of the JSC’s existence is its insulation from political interference. Before the 19th Amendment to the Constitution (2015), the President had sweeping powers over judicial appointments. The amendment introduced checks through the Constitutional Council, ensuring that senior judges and JSC members cannot be appointed or removed without wider parliamentary and civil society approval.

Members of the JSC enjoy constitutional immunity for acts performed in good faith, while interference with its functioning is itself a punishable offence. This framework was deliberately designed to protect judges from executive overreach and guarantee public trust in the system.

The JSC’s Role in Case Management

While the JSC is not a court and does not adjudicate disputes, it exercises supervisory control over how courts are run. Its annual reports reveal a long-standing concern with backlogs. As far back as 2012, the Commission instructed District Courts to identify and conclude cases over three decades old.

The establishment of Civil Appellate High Courts, targeted recruitment of judges, and the introduction of digital systems were part of its strategy to reduce delays.Today’s directive to clear all backlogs by year-end is thus a continuation and intensification of that earlier mission. By using its administrative powers, the Commission seeks to transform structural inefficiency into a nationwide campaign of expedited justice.

Training, Oversight, and Discipline

Beyond appointments and transfers, the JSC also invests in the quality of the judiciary. Through the Judges’ Institute, it organizes training, workshops, and even overseas study programs to strengthen legal capacity.The Commission monitors judicial conduct closely, with established procedures to investigate complaints against judges and impose disciplinary action where necessary. The same scrutiny extends to court staff, ensuring that inefficiency or misconduct at any level is addressed.This dual role,nurturing professional growth while enforcing accountability,positions the JSC as both guardian and regulator of Sri Lanka’s judicial integrity.

Why This Matters to the Public

To many citizens, the judiciary is often perceived as slow, distant, and burdened with bureaucracy. Cases dragging on for years sometimes decades have created frustration and mistrust. The JSC’s current move to demand backlog clearance is a reminder that the judiciary recognizes these concerns.

At the same time, the directive raises questions: Can judges realistically dispose of decades of accumulated cases in just a few months? Will speed come at the cost of thoroughness? And what systemic reforms beyond deadlines are needed to prevent backlogs from re-emerging?

Legal experts argue that while administrative orders are necessary, deeper structural reforms such as digitization, procedural simplification, and alternative dispute resolution are vital for lasting change. Still, the JSC’s action signals a determination to confront the issue head-on, using the powers constitutionally vested in it.

A Balancing Act

The Judicial Service Commission walks a fine line between efficiency and independence. On one hand, it must ensure that the courts deliver timely justice to the people. On the other, it must preserve the autonomy of judges to decide cases free of external pressure. Its current directive, then, is not just an administrative exercise but also a test of whether judicial governance can be both assertive and fair.

Looking Ahead

As the December 31 deadline looms, the nation will be watching whether the JSC’s bold order yields measurable results. Success could reinforce public confidence in the judiciary, proving that a centuries-old backlog can finally be broken. Failure, however, could expose deeper cracks in the justice system, demanding more comprehensive reforms.

What is clear is that the Judicial Service Commission is far more than a bureaucratic body. It is the constitutional guardian of judicial independence, the administrative manager of courts, and now, the architect of a campaign to restore public faith in the rule of law. The coming months will reveal whether it can deliver on this ambitious promise.

CEB Restructuring: Reform, Contradictions, and the Road Ahead”

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CEB Restructuring: Reform, Contradictions, and the Road Ahead”

By:Staff Writer

September 02, Colombo (LNW): The National People’s Power (NPP) government has moved forward with the restructuring of the Ceylon Electricity Board (CEB), issuing new regulations for a Voluntary Retirement Scheme (VRS) aimed at employees unwilling to transfer to the newly created successor companies.

While the step is presented as part of long-awaited reforms, it has also drawn questions about the government’s changing stance given that some of its leading members once strongly opposed similar plans under the previous administration.

From Protest to Implementation

The restructuring follows the Sri Lanka Electricity Act No. 36 of 2024, which sets out a framework to unbundle the CEB. Earlier drafts under Ranil Wickremesinghe’s government proposed dividing the utility into as many as eight to twelve separate entities. That figure has now been reduced to four successor companies.

The move was one of several reforms linked to International Monetary Fund (IMF) recommendations for improving financial sustainability in the energy sector. Yet, during Wickremesinghe’s tenure, NPP factions particularly its JVP leadership vocally protested against the unbundling, warning it could open the door to privatization and job losses.

Today, with the same policy continuing under their own administration, the shift in position has drawn attention. The government’s justification is that restructuring is now being pursued with greater safeguards for workers and stronger public oversight.

Voluntary Retirement Scheme: Key Features

The newly gazetted VRS, issued on 26 August 2025 by Energy Minister Kumara Jayakody, lays out detailed compensation packages:

Permanent staff with over 10 years of service: Two months’ salary per completed year of service

1.5 months’ salary for each year of future service foregone Payments range from a minimum of Rs. 900,000 to a maximum of Rs. 5 million

Permanent staff with less than 10 years: Five months’ salary per year served, without additional payments for foregone service

Contractual/non-permanent staff: Two months’ salary per year served, with a minimum equal to one year’s salary. Employees under disciplinary action or with unsettled dues are ineligible, while those opting for the scheme cannot seek employment with the successor companies in future.



Pros and Cons of the Reform

Potential Benefits:

Unbundling may improve efficiency, transparency, and accountability in electricity generation, transmission, and distribution.

The VRS provides a structured, relatively generous exit package compared to past schemes in state enterprises, ensuring employees unwilling to adapt have an option.

Restructuring could reduce financial losses at the CEB and align operations with IMF requirements, strengthening investor confidence.

Concerns and Risks:

Critics warn that breaking up the CEB could fragment coordination, complicating service delivery in a sector already under strain.

The exclusion of interim allowances in VRS calculations and the ban on re-employment may discourage some employees from applying.

The political inconsistency opposing the same policy in opposition but implementing it in government—raises doubts about long-term commitment to coherent energy policy.

There is public apprehension that restructuring may pave the way, directly or indirectly, to partial privatization.

The Bigger Picture

For the NPP, the CEB reforms are part of broader institutional changes framed as modernization and anti-corruption. However, the political irony is difficult to ignore: the very leaders who once staged protests against unbundling are now responsible for carrying it out.

The government argues that current conditions—particularly Sri Lanka’s debt situation and IMF obligations leave little alternative but to proceed with reforms. Yet balancing fiscal discipline, worker protection, and reliable electricity services will be the real test.

Pensioners Rally in Colombo Demanding Fair Adjustment of Payments

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Pensioners Rally in Colombo Demanding Fair Adjustment of Payments

September 02, Colombo (LNW): A large group of retired public servants gathered outside the Presidential Secretariat in Colombo today, calling on the government to rectify long-standing disparities in their pension payments.

The demonstrators, many of whom had travelled from various parts of the country, included former members of the armed forces, police, and civil service.

Their core demand centred on the revision of pension disbursements that they claim were unjustly reduced during the period between 2020 and 2024, when Sri Lanka faced overlapping crises, including the COVID-19 pandemic and a severe economic downturn.

Protesters voiced their frustration over what they described as an enduring injustice, alleging that their current pensions do not reflect the rates that have since been adjusted for newly retiring public servants.

They argue that while recent retirees benefit from increased payment scales, many long-serving pensioners remain locked into outdated and lower amounts—despite years of dedicated service to the state.

Placards and banners held aloft during the demonstration conveyed messages of discontent, with many retirees stating they were finding it increasingly difficult to manage rising living costs, especially in the wake of inflation and ongoing financial pressures. For some, the issue was not only economic but deeply personal—a matter of dignity, fairness, and recognition.

Following the protest, a small delegation representing the demonstrators was granted entry to the Presidential Secretariat for a closed-door meeting with officials.

Photo Courtesy: Ajith Senevirathne

Italy’s Deputy Minister for Foreign Affairs and International Cooperation to visit Sri Lanka

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Italy’s Deputy Minister for Foreign Affairs and International Cooperation to visit Sri Lanka

September 02, Colombo (LNW): Italy’s Deputy Minister for Foreign Affairs and International Cooperation, Maria Tripodi, is set to embark on an official visit to Sri Lanka from September 03 to 05, 2025—an engagement hailed as the most senior Italian diplomatic visit to the island nation in nearly ten years.

The visit comes at a time of renewed interest in expanding bilateral cooperation between Sri Lanka and Italy, with both countries seeking to reinvigorate their longstanding diplomatic ties, first established in 1952.

It is expected to lay the foundation for a deeper and more structured dialogue on a range of political, economic, and cultural issues.

One of the key highlights of the Deputy Minister’s visit will be her role as co-chair of the first-ever session of the Sri Lanka–Italy Political Consultations. She will lead discussions alongside Sri Lanka’s Deputy Minister of Foreign Affairs and Foreign Employment, Arun Hemachandra.

The meeting is set to formalise regular diplomatic engagement between the two nations and marks the beginning of what officials describe as a “new institutional chapter” in bilateral relations.

A Memorandum of Understanding is scheduled to be signed during the visit, establishing a formal mechanism for ongoing political consultations. The agreement is expected to serve as a strategic framework for dialogue and cooperation across a range of sectors, including trade, investment, education, and people-to-people exchange.

Deputy Minister Tripodi is also due to pay courtesy calls on senior government figures, including Prime Minister Harini Amarasuriya and Foreign Minister Vijitha Herath. These meetings are anticipated to provide an opportunity for candid exchanges on regional and global developments, whilst also exploring avenues for strengthening collaboration in areas of mutual interest.

ADB Backs Sri Lanka’s Healthcare Overhaul with Major Funding Package

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ADB Backs Sri Lanka’s Healthcare Overhaul with Major Funding Package

September 02, Colombo (LNW): In a significant boost to Sri Lanka’s healthcare reform agenda, the Asian Development Bank (ADB) has approved a substantial financial package worth $106.9 million to upgrade and modernise the country’s secondary healthcare services, enhance disease control systems, and strengthen institutional governance within the health sector.

The funding—comprising a $100 million concessional loan and an additional $6.9 million grant from the Pandemic Prevention, Preparedness, and Response Trust Fund—will support a wide-ranging initiative aimed at preparing Sri Lanka’s health system for current demands and future challenges.

The programme, titled Strengthening Integrated Health Care and Governance for Universal Health Coverage, will target both infrastructure development and systemic improvements.

While Sri Lanka has long been recognised for its achievements in providing accessible public healthcare, rising life expectancy, shifts in disease profiles, and growing demand for specialist treatment have placed increasing pressure on secondary care services.

Noncommunicable diseases, ageing populations, and recurring threats from communicable outbreaks have underscored the need for a more integrated and responsive healthcare system.

Through a results-based lending approach, this new programme will focus on upgrading hospital facilities, increasing access to surgical and specialist services, and integrating secondary hospitals more closely with primary care and community-level health infrastructure. This is expected to create a more seamless referral system and ensure patients receive timely and appropriate care.

The initiative also includes targeted investments in pandemic readiness. Plans are underway to establish a national centre for disease control, bolster public health laboratory networks, and introduce a robust cross-sector disease surveillance mechanism to detect and respond to emerging health threats more rapidly.

In a parallel effort to improve governance, the programme will support the digital transformation of government procurement in the health sector, alongside reforms to strengthen transparency, quality assurance, and regulatory oversight in pharmaceutical supply chains. These changes are intended to curb inefficiencies, improve service delivery, and uphold integrity in healthcare procurement practices.

The ADB has also emphasised the programme’s commitment to climate resilience, gender equity, and elderly-focused care. New infrastructure and service models are expected to reflect these priorities, creating a more inclusive and adaptive healthcare system that meets the needs of all segments of the population.

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