Global investors and Sri Lanka officials expect to hold a second round of talks aimed at restructuring US $12 billion in defaulted International Sovereign Bonds later this month, according to informed official sources 

A group of bondholders, known as a steering committee, and government representatives came away from a first round of negotiations in Europe in late March without a deal.

They plan to continue the discussions around the International Monetary Fund’s spring meetings in Washington DC, which start April 15, said the people, who asked not to be identified as the discussions are private. They didn’t disclose details of the proposal that’s under consideration. 

A deal with private investors is among the last steps in Sri Lanka’s plan to overhaul $27 billion of foreign debt, including bonds and loans.

 The restructuring is critical to ensure financing from the IMF bailout keeps flowing. The government has already struck deals with official creditors, including China, India and the Paris Club as well as with holders of its local debt

Sri Lanka officials expect to hold a second round of talks aimed at restructuring $12 billion in defaulted global bonds later this month, according to official sources  

The International Monetary Fund (IMF) says there is a strong expectation that agreements with commercial creditors consistent with program parameters will be reached by the completion of Sri Lanka’s second review.

Addressing the IMF’s press briefing, Director of the Communications Department Julie Kozak said the next steps on the debt restructuring are to conclude the negotiations with external commercial creditors and to implement agreements in principle with official creditors.  

Julie Kozak further said that the domestic debt operations part of the debt restructuring, are largely completed.

“Completion of the review by the Executive Board requires, first, the implementation of the prior actions that have been agreed and second, completion of what we call financing assurances review. That review would need to confirm that multilateral partners are continuing their financing contributions to Sri Lanka, and it will also assess progress with debt restructuring and will need to conclude that adequate progress is being made,” she said. 

Julie Kozak also pointed out that macroeconomic policy reforms in Sri Lanka are starting to bear fruit. 

“Commendable outcomes include rapid disinflation, robust reserve accumulation, and initial signs of economic growth while preserving the stability of the financial system.  Public finances have strengthened following substantial fiscal reforms, and it is critical that this reform momentum be continued,” she added.

Julie Kozak made the remarks in response to a question raised regarding an update on the debt restructuring process, including with China state creditors

Two state banks are to be protected as national assets with alternative proposals on preservation and maintenance of banking institutions, Prime Minister Dinesh Gunewardena.  

He made this comment at a discussion with trade union representatives which was held at Temple Trees recently. Trade Union activities and institutional issues were discussed during the discussion.

The representatives of the trade unions presented many points regarding the restructuring of institutions, alternative proposals on preservation and maintenance of institutions.

The government has devised a plan of rescue to safe guard Sri Lanka’s two key state owned banks, the Bank of Ceylon and the Peoples Bank in light of capital adequacy challenges, the Committee on Banking and Financial Services recent report revealed.  

Finance ministry has already taken precautionary measures to tackle the impact on capital position of these two banks following the potential debt restructuring of state-owned enterprises amounting to US$ 3,739 million by the end of 2022.

This has pushed the two state banks apparently towards the debt risk exposing capital adequacy problem.  

In this context, the committee has recommended to consider recapitalising these two banks through institutional investors, such as the International Finance Corporation (IFC) and Asian Development Bank (ADB).

Moreover the treasury has allocated Rs.450 billion from the 2024 budget for the recapitalisation of the state banks, including BOC and the Poples Bank.  

However, this recapitalisation will mainly benefit business owners with insolvent enterprises instigating a risk under prevailing banking practices. 

The higher capital levels of banks will enable it to avoid declaring bankruptcy of insolvent companies and instead, renegotiate and/or extend the terms of their loans. Banking and Financial Services recent report observed.   

According to state bank rescue plan, measures will be taken to sell 20 percent stake in state banks to strategic investors or the public, a senior official of the finance ministry disclosed. 

It will support the future growth of the two state-owned banks to reduce the burden on taxpayers’ funds,” he said.

The treasury has also set apart funds to cover US$ 510 million from the total US$ 1.2 billion debt that the airline owed to banks and other institutions, he added. .

Ir has taken over debt worth Rs. 100 billion of SriLankan Airlines sparing the US $ 175 million five year international bond.

The national carrier’s liabilities included $ 105 million of Treasury guaranteed debt due to Bank of Ceylon, $ 12.9 billion of Treasury guaranteed debt due to Bank of Ceylon, $ 105 million of Treasury guaranteed debt due to People’s Bank and Rs. 18.5 billion of Treasury guaranteed debt due to People’s BankAs part of the actions agreed under the IMF-EFF arrangement, the outstanding foreign currency debt of Rs. 884.1 billion of the Ceylon Petroleum Corporation (US $ 2,434.8 million) was absorbed into central government debt by end 2022

Sri Lanka’s economy is projected to see moderate growth of 2.2% in 2024, showing signs of stabilization in the wake of public investment disbursement acceleration under strict regulation

But, the country still faces elevated poverty levels, income inequality, and labor market concerns, says, following the severe economic downturn of 2022.the World Bank’s latest bi-annual update.

At the same time, private investment growth has slowed sharply in all South Asian countries and the region is not creating enough jobs to keep pace with its rapidly increasing working-age population

The government has allocated a massive sum of Rs 1.2 trillion for public investment projects in 2024 issuing guidelines require all project proposals utilising the Consolidation Fund to be submitted to the National Planning Department (NPD)  where there undergo preliminary and detailed appraisal before moving to the funding arrangement stage

Break down of project investments this year for seven key sectors are social Infrastructure Rs.  210.64 billion, agriculture Rs57.72billion ,commercial infrastructure Rs.743.33billion  governance Rs73 billion ,environment  Rs7.14 billion Social Protection Rs13.29 billion and ,regional development Rs.71.47 billion, finance ministry data shows.    

According to a latest department circular, a significant number of project proposals are directly submitted to the Cabinet for approval skipping appraisal by the NPD entirely. 

Approval of the projects without NDP’s appraisal and recommendations creates major deviations such as duplication of similar projects by different institutions, inability to prioritise development initiatives, and mismanagement of constrained fiscal space, it added.

The government is to accelerate public investment disbursement for priority projects generating return on investment to further economic growth post-crisis period this year.

Disbursing public investment capital is vital for the country’s economic recovery as it looks to bounce back from the negative effects of the pandemic and slowdown in its economy.

A new public finance management (PFM) Law will be promulgated soon, with an integrated public investment management (PIM) section with provisions that establish a unified approach to prioritising capital investment projects based on explicit criteria early in the budget process

The Ministry of Finance is required to ensure that all projects included in budget documents are from the list of assessed and prioritised projects.

An enhanced regulatory framework will be established for treatment of unsolicited proposals including the manner in which such proposals can be received and evaluated.

The ministry is to publish on a government website a list of funded projects that have originated as unsolicited proposals every 6 months, along with information on lead contractor for the proposals, contract cost, and implementation progress.

April 06, Colombo (LNW): In response to a motion initiated by the Opposition, the Sri Lankan Parliament has scheduled an adjournment debate on the 2019 Easter Sunday attacks, slated to take place from April 24th to April 26th. This decision was reached during a meeting of the Parliamentary Business Committee chaired by Deputy Speaker Ajith Rajapakse, as announced by the Parliament’s Communication Department in a press release.

The debate will commence on April 24th, with discussions on the Code of Criminal Procedure (Amendment) Bill (Second Reading) and Regulations under the Poisons, Opium and Dangerous Drugs Ordinance from 9:30 am to 10:30 pm. Subsequently, the focus will shift to the adjournment debate on the Easter Sunday attacks, which is scheduled from 10:30 am to 5:30 pm.

Continuing on April 25th, the Parliament will deliberate on various regulations and notifications under different legislative acts, following which the adjournment debate on the Easter Sunday attacks will resume from 10:30 am to 5:30 pm. This discussion will extend into April 26th, encompassing the entire day from 9:30 am to 5:30 pm.

The decision to dedicate three days to this crucial debate underscores the significance of addressing the ramifications of the tragic events of the 2019 Easter Sunday attacks.

In remarkable collaboration NDB Bank proudly joined forces with the National Institute of Business Management (NIBM School of Business) as the official banking partner for the prestigious Mind Maze Marathon Inter-School Quiz Competition. This exciting event, organized by the Business Management undergraduates of the NIBM School of Business, provided a dynamic platform for school students to showcase their academic prowess in the fields of business and commerce.

The Mind Maze Marathon focuses on fostering Outcome-Based Learning, a key initiative aimed at equipping students with essential knowledge and skills for future success. The competition strategically integrates activities that promote critical thinking, effective communication, teamwork, and other crucial competencies among participants, ensuring a holistic learning experience. NDB’s participation in such an initiative, underscores NDB’s commitment to fostering educational initiatives that empower the younger generation and the importance of equipping students with essential knowledge and skills for future success.

Several esteemed schools participated in the event, including renowned government and private institutions, creating a diverse and competitive environment. Leveraging technology, the competition utilized the NIBM School of Business Learning Management System as the official platform, providing participants with an advanced and immersive learning experience.

In a thrilling conclusion to the competition, Visakha Vidyalaya emerged as the champions, showcasing their exceptional knowledge and strategic thinking. Sirimavo Bandaranaike Vidyalaya secured the 1st runner-up position, while Hindu Ladies College claimed the 2nd runner-up title. NDB Bank congratulates these winning schools for their outstanding achievements in the Mind Maze Marathon, which is a testament to their academic excellence and teamwork.

The successful collaboration with NIBM School of Business for the Mind Maze Marathon exemplifies NDB’s dedication to supporting educational endeavors that contribute to the holistic development of future leaders. Through initiatives like the Mind Maze Marathon, NDB continues to empower the younger generation, nurturing their potential to become impactful leaders and contributors to society.

NDB Bank is the fourth-largest listed commercial bank in Sri Lanka. The Bank was named the Retail Bank of the Year (Sri Lanka) at Asian Banking & Finance Retail Banking Awards 2023 and the Best Corporate Bank 2023 by Asiamoney and also emerged as the Most Awarded Corporate in Sri Lanka in 2022 for the second consecutive year, as per the annual rankings of Sri Lankan publication LMD. The Bank was adjudged the Best Bank in Sri Lanka 2022 by Global Finance USA and Euromoney in their annual best bank awards programmes. Additionally, The Bank was named one of the “Top 50 Best Workplaces in Sri Lanka 2022” by Great Place To Work, USA. NDB is the parent company of the NDB Group, comprising capital market subsidiary companies, together forming a unique banking and capital market services group. The Bank is committed to empowering the nation and its people through meaningful financial and advisory services powered by digital banking solutions.

April 06, Colombo (LNW): The Sri Lanka Mobile Phone Importers’ and Sellers’ Association has announced a notable decline in mobile phone prices, ranging between 18% to 20%. Association President, Samith Senarath, attributed this price reduction to the consistent appreciation of the Sri Lankan Rupee against the US Dollar.

Speaking at a press briefing on the matter, Senarath highlighted that the recent strengthening of the Sri Lankan Rupee has positively impacted the pricing of mobile phones in the country. This development marks a significant relief for consumers who have been facing high costs for mobile devices in recent times.

The association’s statement underscores the correlation between currency exchange rates and consumer prices, emphasizing the tangible benefits of a favorable exchange rate environment. With the Sri Lankan Rupee showing signs of stability and appreciation against major currencies, including the US Dollar, consumers can expect more affordable options when purchasing mobile phones.

Senarath’s remarks signal a positive trend in the mobile phone market, indicating improved accessibility and affordability for Sri Lankan consumers.

April 06, Colombo (LNW): In a significant update on Sri Lanka’s debt repayment efforts, Mr. Rajith Keerthy Tennakoon, President Director General of Community Affairs, announced that the government has settled a total of USD 1909.7 million in foreign debt and interest payments between President Ranil Wickremesinghe’s assumption of office and February 2024.

According to Mr. Tennakoon, from July 21, 2022, to February 2024, the government disbursed USD 1338.8 million in multilateral loans and interest, with no outstanding arrears in loan instalments or interest payments up to February 2024.

Highlighting the breakdown of payments, Mr. Tennakoon stated that significant amounts were paid to institutions such as the Asian Development Bank (USD 760.1 million), the International Monetary Fund (USD 9.8 million), and the World Bank (USD 489.9 million), among others.

The positive track record in debt repayment has enabled Sri Lanka to negotiate further financial support from institutions like the ADB, IMF, and World Bank. Bilateral loan agreements with various countries and financial institutions have also contributed to strengthening the country’s financial position.

Despite these achievements, discussions are ongoing with relevant states and institutions to finalize agreements on the repayment of bilateral loans and interest amounting to USD 571.0 million. Preliminary agreements have been reached with members of the Paris Club, with outstanding interest to be settled by the end of February 2024, totaling USD 450.7 million.

Additionally, efforts are underway to restructure business loans and interest totaling USD 4,439.2 million to alleviate the burden of high-interest rates. However, the reinstatement of the special interest rate for fixed deposits of senior citizens, initially introduced in 2015, faces challenges due to the country’s economic crisis.

Mr. Tennakoon emphasized the need for sustainable financial management practices to prevent future crises and ensure economic stability. He highlighted the importance of addressing the necessary funding for reinstating the special interest rate for senior citizens and upholding prudent financial policies to foster economic growth.

1. President Ranil Wickremesinghe emphasized that the renewal of knowledge stands as a pivotal task within the realm of education, underscoring the trajectory towards a knowledge-based society for the nation’s advancement over the next 75 years. Acknowledging the burgeoning role of modern technology and knowledge as the new pillars of education, he warned that irrespective of economic prowess, failure to synchronize with global transformations would impede progress.
2. Opposition Leader Sajith Premadasa said that he will convene an international aid conference to develop the North and East when the Samagi Jana Balawegaya (SJB) comes into power. He said addressing an event at Mullaitivu where he distributed equipment needed for a digital classroom to Thanneeroottu Muslim School.
3. Actress Damitha Abeyratne and her husband, who was arrested by the Criminal Investigation Department (CID) over an alleged financial fraud, has been remanded on the orders of the Colombo Fort Magistrate’s Court. Accordingly, the couple will be behind bars on remand until April 17.
4. Vegetable prices in Dambulla Economic Centre have dropped to its lowest after about 10 years. Traders of the Dambulla Economic Centre said that the price has come down due to the increase in the amount of vegetables received at the centre daily.
5. Rajith Keerthy Tennakoon, President Director General of Community Affairs says that after between President Ranil Wickremesinghe’s assumption of office and February 2024, the Sri Lankan government has settled a total of USD 1909.7 million in foreign debt and interest payments. According to the Department of External Resources, payments totalling USD 760.1 million have been made to the Asian Development Bank and USD 7.0 million to the Asian Infrastructure Investment Bank.
6. Speaking to the media, Siyambalapitiya expressed that the Cabinet of Ministers approved the import of 250 buses and 750 vans intended for the tourism industry. The approval was given after taking into account the unsatisfactory and insufficient conditions of the vehicles currently used in the tourism industry, despite the fact that vehicles engaged in the industry for tourist transportation should not be used for more than 6 years.
7. The Sri Lanka Freedom Party (SLFP) has lodged a complaint with the Maradana Police, alleging that several ‘important’ files have gone missing from the party headquarters. The complaint was filed by the party’s Acting General Secretary Dushmantha Mithrapala.
8. The prices of mobile phones in Sri Lanka have dropped by 18% – 20%, says the Sri Lanka Mobile Phone Importers’ and Sellers’ Association.
9. The first prohibition order under Sri Lanka’s “Online Safety Act”, which was recently passed to regulate social media, has been issued by the Colombo Magistrate’s Court. According to media reports, Colombo Magistrate Prasanna Alwis issued the order after taking up for consideration a complaint that had been filed by the former Chairman of the Public Utilities Commission of Sri Lanka (PUCSL), Janaka Ratnayake.
10. Minister of Water Supply and Estate Infrastructure Development, Jeevan Thondaman has been recognised as a Young Global Leader by the World Economic Forum. The World Economic Forum announced Minister Thondaman’s selection, highlighting his role in improving access to clean water and advocating for social justice. 

April 06, Colombo (LNW): The Sri Lankan Ministry of Agriculture is intensifying efforts to address the significant loss of nearly 40% of fresh vegetables and fruits during transportation from distant cultivation areas to major markets. Minister Mahinda Amaraweera emphasized the importance of implementing proper transportation guidelines to minimize such losses, particularly in key vegetable markets like Dambulla and Peliyagoda.

According to the Industrial Technology Institute of Sri Lanka (ITISL), vegetables and fruits are primarily transported from cultivation districts such as Dambulla, Peliyagoda, Polonnaruwa, Nuwara Eliya, and Ampara to economic centers nationwide, and then further to urban centers like Colombo.

Minister Amaraweera highlighted the potential to reduce the current 40% loss rate to around 10% by adopting measures such as using plastic crates for transporting certain varieties like tomatoes, cabbage, and citrus fruits. Additionally, proper timing of harvest for certain vegetables and fruits, including ladies’ fingers, beans, papaya, and mangoes, can further minimize losses.

The minister emphasized the need for farmers to adhere to proper agricultural practices to maximize the longevity of their produce. Harvesting at the right time, before maturity, is crucial to preserving freshness and quality during transportation.

Concerns were also raised about the detrimental effects of improper transportation practices, such as workers sitting on gunny bags filled with fresh produce, which accelerates spoilage.

Somasiri Peiris, a member of the Peliyagoda Manning Market Vegetable Traders Association, highlighted the potential role of strengthened railway transportation in reducing losses. He noted that significant quantities of vegetables and fruits, amounting to around 3,000 kg daily, are currently being discarded due to transportation challenges.

The Ministry’s proactive measures, coupled with cooperation from farmers, traders, and transportation authorities, are essential in minimizing post-harvest losses and ensuring the efficient distribution of fresh produce across the country.