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Government Tackles Coconut Oil Price Surge amid Supply Crisis

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By: Staff Writer

November 28, Colombo (LNW):The Sri Lankan government is set to implement immediate measures to stabilize coconut and coconut oil prices, which have soared due to supply shortages and high domestic demand, according to the Agriculture Ministry. A senior official highlighted the urgency, noting the ongoing challenge of meeting local coconut demand.

Sri Lanka’s coconut oil consumption, currently 34,000 metric tons annually, is projected to reach 40,600 metric tons by 2026, growing at an average rate of 2.9% per year since 2017.

Despite being the 10th largest consumer globally in 2021, Sri Lanka faces rising costs in the global edible oil market, driven by climate issues and international demand. Refined coconut oil prices have risen from $1,320 to $1,880 per ton, with palm oil nearing $1,250 per ton.

Locally, wholesale coconut oil prices have jumped from Rs. 630 to Rs. 700 per kilogram, with retail prices reaching Rs. 1,350 per liter. These increases have forced the market to turn to cheaper imported oils. Meanwhile, the ongoing Russia-Ukraine conflict has reduced sunflower oil prices, benefiting India but leaving Sri Lanka grappling with higher coconut oil costs.

In response, the government is considering easing palm oil import restrictions, introduced in 2022, to reduce the financial burden. Currently, coconut oil imports cost Sri Lanka approximately $3.5 million monthly, a figure that could be cut by $50 million annually if restrictions are lifted. Local refiners favor crude palm oil imports, while distributors prefer refined varieties. Meeting demand through imports could stabilize coconut oil prices and boost government revenue under the existing tariff structure.

The edible oil market also faces hurdles from rising freight costs and regulatory inefficiencies. Freight charges have surged due to the U.S.-China trade conflict, leading importers to rely on smaller vessels. Customs delays and stockpiling by importers have further complicated the situation.

Sri Lanka consumes 10,000 metric tons of edible oil monthly, but local production has halved to just 4,000–5,000 metric tons due to economic challenges and reduced purchasing power. Of the 240,000 metric tons of coconut oil consumed annually, only 40,000 tons are locally produced, with the rest supplemented by substitutes.

Over 90% of Sri Lanka’s food processing companies depend on palm oil, which is also found in over 60% of supermarket products. Emeritus Prof. Asoka Nugawela of Wayamba University suggests that palm oil cultivation is economically viable, with minimal evidence linking it to deforestation.

Prompt action is needed to address the price hikes, secure imports, and support the struggling local oil industry.

Sri Lanka’s Cybersecurity Framework to under go reforms with Urgent Updates.

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By: Staff Writer

November 28, Colombo (LNW): Sri Lanka’s Computer Crimes Act (CCA) requires urgent modifications to address modern cybersecurity threats effectively, according to Public Security Ministry Secretary Ravi Seneviratne.

Speaking at the 10th Annual Cyber Security Summit hosted by Daily FT and CICRA, Seneviratne stressed the inadequacy of current mechanisms in combating cybercrime and highlighted the pressing need for legislative updates and enhanced training for law enforcement.

Enacted in 2007, the CCA criminalizes unauthorized access to computers, data, and programs and provides guidelines for investigating and prosecuting such crimes.

 However, the Act’s fixed penalties—imprisonment up to five years or fines up to Rs. 300,000—are considered insufficient for addressing the evolving complexity of cybercrimes, such as hacking and cyber-attacks.

Experts also point out the lack of provisions to distinguish between varying degrees of offenses based on their impact, underscoring the need for a “proportional punishment” framework.

Seneviratne admitted that current enforcement mechanisms are outdated and called for legislative reforms to align with evolving cyber threats. A research paper on modernizing Sri Lanka’s cybercrime laws echoes this sentiment, emphasizing the necessity of incorporating principles of proportional punishment to achieve the objectives of criminal law.

The pending Cyber Security Act, which proposes establishing a Cyber Security Agency and granting the Sri Lanka Computer Emergency Readiness Team (SL CERT) enhanced powers, has also been identified as a critical measure.

LankaPay CEO Channa de Silva urged swift parliamentary approval of the Act, noting that SL CERT’s current inability to enforce cybersecurity guidelines leaves organizations vulnerable. De Silva also emphasized the importance of separating military and civilian cybersecurity to safeguard key civilian infrastructure like water and electricity boards.

Highlighting the global dimension of cybercrime, Visa India and South Asia Vice President Vipin Surelia revealed that cybercrime costs are projected to reach $10.5 trillion in 2024, with a staggering annual growth rate of 32%. He identified key drivers behind this trend, including the rise of AI-powered attacks, advanced tools leveraged by cybercriminals, and vulnerabilities in non-traditional payment methods.

The summit underscored the critical need for Sri Lanka to modernize its cybercrime framework and strengthen institutional defenses. Enhancing legislative measures, equipping law enforcement with advanced skills, and segregating military and civilian cybersecurity operations were identified as essential steps to fortify the nation against rising cyber threats.

Sri Lankas Renews Commitment to Combat Corruption and Financial Crimes.

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By: Staff Writer

November 28, Colombo (LNW): Under the leadership of President Anura Kumara Dissanayake, Sri Lanka is intensifying efforts to investigate and address high-profile corruption cases and financial crimes. The administration is focusing on recovering overseas assets linked to prominent political figures and is reviewing international legal frameworks to facilitate this process.

Key cases under scrutiny include the Central Bank bond scam, misappropriation of sugar tax funds, garlic fraud, coal procurement for the Lakvijaya Power Plant from 2022 to 2025, and the purchase of 96,000 metric tons of organic fertilizer.

Public Security Minister Ananda Wijepala announced plans to establish a mechanism for stolen asset recovery in line with the Stolen Asset Recovery Initiative (StAR Initiative). He emphasized the need for new legislation to support this mechanism, aligning with the government’s mandate from the recent elections.

Regarding the revival of the Financial Crimes Investigation Division (FCID), Minister Wijepala stated that while the FCID currently operates under the Criminal Investigation Department (CID) without being a separate entity, its functions will continue.

He noted that some initiatives to combat corruption and fraud can proceed under existing laws, but establishing a special investigative agency for stolen asset recovery would require new legislation.

The National People’s Power (NPP) party, which emphasizes rooting out corruption and fraud, is committed to enforcing laws that prevent corrupt individuals from easily obtaining bail.

Wasantha Samarasinghe, convener of the JVP-led Anti-Corruption Voice and a member of the NPP executive committee, revealed that 118 files related to alleged financial crimes, previously investigated by the now-defunct FCID, remain pending at the Attorney General’s Department. These cases, submitted in 2016, have been reviewed and completed by the FCID but are still awaiting prosecution.

The International Monetary Fund (IMF) has acknowledged the significance of recent corruption investigations in Sri Lanka.

The IMF’s Technical Assistance Report on Governance Diagnostic Assessment observed that widespread protests in 2022 revealed public consensus that systemic corruption played a significant role in precipitating the country’s economic crisis.

The resignation of former President Gotabaya Rajapaksa in July 2022 underscored the need for governance reform as a vital part of economic recovery, with civil society playing an instrumental role in advocating for accountability and transparency.

The enactment of the Anti-Corruption Act No. 9 of 2023 by the previous regime repealed the long-standing Bribery Act No. 11 of 1954, the Commission to Investigate Allegations of Bribery or Corruption Act No. 19 of 1998, and the Declaration of Assets and Liabilities Law No. 1 of 1975. Under this new legislation, the Anti-Corruption Commission has the authority to conduct preliminary inquiries upon receiving complaints, information, or motions.

Upon finding reasonable grounds to suspect an offense, the Commission can direct the Director General of the Bribery or Corruption Investigation Commission to conduct a full investigation and initiate criminal proceedings in the relevant courts.

This strengthened legislative and investigative framework is expected to restore public trust and provide a clear path forward in tackling corruption and financial misconduct across the nation.

SL, WB discuss strategic development priorities

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By: Isuru Parakrama

November 28, Colombo (LNW): On the 27th of November, a virtual meeting was held between Sri Lankan President Anura Kumara Dissanayake and Mr. Ajay Banga, the President of the World Bank Group, to explore the future development trajectory of Sri Lanka.

The discussion, which took place at the Presidential Secretariat, focused on identifying key areas for collaboration in promoting long-term economic stability and growth.

In the meeting, Mr. Banga underscored the World Bank’s ongoing commitment to addressing critical development challenges across the globe, with particular emphasis on fostering job creation.

He also highlighted the bank’s role in providing both financial and technical support to Sri Lanka, aimed at driving innovation and transforming various sectors vital to the nation’s development.

These areas include education, healthcare, social protection, and broader economic prosperity.

The World Bank’s support, according to the statement from the President’s Media Division, would extend beyond immediate financial assistance to encompass vital aspects such as enhancing Sri Lanka’s economic policy, bolstering investments, improving competitiveness, strengthening institutions, and reducing poverty.

Additionally, the World Bank aims to assist in advancing agriculture, water resource management, and addressing climate change.

Sustainability efforts are also a major priority, with a focus on environmental preservation, social inclusion, infrastructure development, and the digitisation of various sectors to ensure comprehensive and inclusive growth.

During the talks, President Dissanayake outlined the Sri Lankan government’s concerted efforts to alleviate poverty, particularly in rural areas.

He emphasised the importance of improving government revenue by leveraging digital technologies, as well as reinforcing strategic sectors such as tourism, maritime industries, state-owned enterprises (SOEs), and energy, with particular focus on encouraging foreign investment in power generation projects.

The President also shed light on the government’s initiatives to promote regional development in the Northern and Eastern provinces. He stressed the need for enhanced educational and healthcare systems, alongside more targeted efforts in human resource development.

Furthermore, Dissanayake pointed out the growing necessity of aligning vocational education with academic learning to equip the future workforce with the skills needed to meet evolving industry demands, particularly in these regions.

Banga shared the exciting news that Sri Lanka has been selected as one of only 20 countries globally to host the new integrated South Asia office. The office is set to open in July 2025, as part of a broader initiative to strengthen the World Bank Group’s global network.

This new office will facilitate better coordination among the bank’s four main arms—the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA)—to streamline efforts and improve development outcomes in the region.

The meeting was also attended by Deputy Minister of Economic Development, Prof. Anil Jayantha, and Deputy Minister of Finance and Planning, Dr. Harshana Suriyapperuma, both of whom participated in the fruitful discussions.

2024 GCE A/L Exams dragged in till Dec 03 due to severe weather

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By: Isuru Parakrama

November 28, Colombo (LNW): In response to the ongoing adverse weather conditions, the Sri Lanka Examinations Department has announced a postponement of the 2024 GCE Advanced Level (A/L) examinations.

Originally scheduled to begin later this week, the exams will now commence on December 4, 2024.

Amith Jayasundara, the Commissioner General of Examinations, confirmed that the decision was made after carefully considering the impact of the severe weather on the safety and well-being of students and exam personnel.

The examinations, which were initially set to start earlier, have been delayed by one day, with the new starting date now confirmed for December 4.

The Department has advised all candidates and examination centres to stay updated on any further instructions, including possible changes to venue arrangements, as weather conditions continue to be closely monitored.

CBSL introduces new overnight policy rate, cuts monetary policy by 50 basis points

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By: Isuru Parakrama

November 28, Colombo (LNW): The Central Bank of Sri Lanka has introduced a new primary policy tool known as the overnight policy rate (OPR), setting it at 8.00 per cent.

This marks a 50-basis-point reduction in the central bank’s policy stance, targeting the call money rate, which is commonly used in the interbank market.

The call money rate, which stood at 8.55 per cent the previous day, is now expected to align closely with the OPR, reinforcing the Central Bank’s efforts to influence market lending rates more effectively.

Governor Nandalal Weerasinghe explained that this shift to a single policy rate structure would enhance the effectiveness of monetary policy, facilitating smoother transitions in both the government securities market and the broader economy.

By targeting the call money rate—the interest rate at which commercial banks lend to each other overnight—the OPR will serve as a more precise tool for adjusting market lending rates and guiding overall economic activity.

The move comes amidst a deflationary environment that has seen Sri Lanka experience two consecutive months of falling prices, with no immediate signs of inflation returning to positive figures until mid-2025.

In this context, the Central Bank has opted to ease its monetary stance further, expecting inflation to gradually converge towards the target level of 5.0 per cent over the medium term.

The immediate impact of the OPR adjustment was evident in the Treasury bill auction held shortly thereafter, where yields dropped significantly.

The benchmark one-year Treasury bill yield, in particular, fell by 70 basis points to 9.08 per cent, indicating stronger demand for government securities and market expectations of further easing in monetary conditions.

Although the Central Bank has streamlined its approach by adopting a single policy rate, the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) will remain in place for overnight transactions, albeit no longer as primary policy rates.

These rates will now be linked to the OPR, with the SDFR set at 7.50 per cent and the SLFR at 8.50 per cent, establishing a narrow 50-basis-point band for overnight borrowing and lending transactions.

The broader economic context for this policy adjustment reflects improved conditions in Sri Lanka’s external sector, with foreign currency reserves now at US $6.5 billion, providing a stronger buffer to support monetary policy easing.

The Central Bank has revised its growth forecast for 2024, now expecting the economy to expand by 4.5 to 5.0 per cent, a higher figure than initially anticipated, largely driven by stronger external trade and a gradual recovery in key sectors.

Sri Lanka voices support for Israel-Lebanon ceasefire amidst hopes for regional stability

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By: Isuru Parakrama

November 28, Colombo (LNW):  The Ministry of Foreign Affairs has officially expressed its backing for the newly announced ceasefire between Israel and Lebanon, urging that this development may signal the possibility of long-lasting peace in the region. 

In a statement, the Ministry stressed that the government conveyed its optimism, highlighting its hope that the truce would lay the groundwork for stability, not only in Lebanon but across the broader Middle East.

The ceasefire, which was announced on November 26, marks a significant step toward halting nearly 14 months of hostilities, primarily driven by the ongoing conflict between Israel and Hamas in Gaza. 

This temporary cessation of violence follows a particularly volatile period, with both Hezbollah and Israeli forces engaging in direct confrontations that had further escalated the situation.

Although there have been no immediate reports of violations following the ceasefire’s commencement, signs of relief and celebration have emerged in Beirut, as many are hopeful that the truce will hold. Nevertheless, Israel has made it clear that any breach by Hezbollah could lead to retaliation. 

The ceasefire agreement mandates a two-month suspension of hostilities, during which Hezbollah is expected to withdraw its military forces from southern Lebanon, while Israeli troops will also be required to pull back to their side of the border. 

To enforce the ceasefire, additional Lebanese troops, along with United Nations peacekeepers, will be deployed in the southern region, and a monitoring panel, led by the United States, will oversee compliance.

Despite the relative calm, an Israeli military spokesperson cautioned against the return of residents to southern Lebanon, stating that the area remains under Israeli military surveillance. 

This came just hours after Israel had launched its heaviest airstrike campaign on Beirut, marking the most intense bombardment of the city since the conflict’s inception. 

Local authorities reported at least 42 deaths from the airstrikes, which had targeted various locations across the country.

While the ceasefire brings a much-needed respite to Lebanon, it does not address the ongoing and devastating war in Gaza, where Hamas continues to hold hostages, and the conflict remains unresolved. 

Lebanon’s caretaker Prime Minister Najib Mikati has welcomed the truce, describing it as a vital step toward restoring stability and enabling the return of displaced citizens to their homes.

Hezbollah has officially stated its acceptance of the ceasefire but has indicated that it is still reviewing the agreement’s final terms. A senior official from the group, Mahmoud Qamati, emphasised that while Hezbollah desires an end to hostilities, it would not accept any violations of Lebanon’s sovereignty. 

The group’s forces are required to withdraw to positions north of the Litani River, which is located roughly 30 kilometres from the border.

This development comes after a year of escalating violence, sparked by Hezbollah’s retaliatory actions in northern Israel on October 08, 2023, following the Hamas-led attack on Israel. Since then, both parties have exchanged frequent artillery fire, further intensifying the regional crisis.

Election Commission ponders dates for LG Polls amid examination concerns

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By: Isuru Parakrama

November 28, Colombo (LNW): The Election Commission is currently deliberating on suitable dates for the upcoming local government elections, with a focus on ensuring that the elections do not clash with ongoing examination schedules.

In a meeting held yesterday (27) chaired by R.M.A.L. Ratnayake, the Commission discussed various aspects of the electoral process, including timing and logistics, while taking into account the importance of not disrupting academic activities.

While no definitive date for the elections was set during the meeting, the Chairman assured that the Commission will reconvene in the near future to finalise the election schedule.

He reiterated that the urgency of holding the local government elections is underscored by a ruling from the Supreme Court, which has directed that the elections be held without unnecessary delays.

The final decision on the election date is expected to be reached shortly, with the Commission prioritising both the constitutional mandate and the academic calendar.

Moody’s reviews SL’s credit rating for potential upgrade following debt restructuring efforts

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By: Isuru Parakrama

November 28, Colombo (LNW): Moody’s Investors Service has announced that it is reviewing Sri Lanka’s Ca long-term foreign currency rating for a possible upgrade, a move triggered by the government’s recent bond-exchange offer.

This development comes after the country launched the bond swap on Tuesday, a key component of its ongoing debt restructuring programme, which is aimed at addressing its $12.55 billion external debt.

The bond exchange is an integral step in Sri Lanka’s efforts to stabilise its economy and navigate its financial challenges.

This restructuring initiative follows the country’s historic default on its foreign debt in May 2022, which marked a critical point in Sri Lanka’s economic crisis.

The default was triggered by a crippling debt burden, exacerbated by dwindling foreign exchange reserves and mounting fiscal pressures.

As part of the restructuring process, the Sri Lankan government has also introduced new US dollar-denominated debt instruments, which Moody’s has provisionally rated at Caa1.

Severe weather disrupts SL: Thousands of families affected by floods, heavy rains

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By: Isuru Parakrama

November 28, Colombo (LNW): Adverse weather conditions have caused widespread disruption across Sri Lanka, with 20 districts experiencing significant impact.

According to the Disaster Management Centre (DMC), a total of 80,642 households in 166 Divisional Secretariat divisions have been affected by the ongoing storms and flooding.

The DMC has reported that 276,550 individuals are currently grappling with the effects of the extreme weather, and 16,553 people from 5,305 families have been forced to seek shelter in safer locations.

In addition to the immediate challenges posed by the heavy rainfall, the Irrigation Department has raised concerns about the ongoing flood risks in low-lying areas near reservoirs.

G.W.A. Sakura Dilthara, an Irrigation Engineer, warned that rising water levels in key rivers, particularly the Deduru Oya and the Mahaweli River, are likely to worsen the flooding in the surrounding regions.

The increased water flow poses a serious risk to communities living near these watercourses, potentially leading to further displacement and damage to property.

The situation remains dire, with authorities urging the public to stay alert and take necessary precautions as the rainfall continues.

Emergency services remain on high alert, working to support affected families and mitigate the risks posed by the relentless weather conditions.