August 21, Colombo (LNW): For the first time since April 2020, Sri Lanka’s Net Foreign Assets (NFAs) in the banking sector have turned positive, reaching Rs. 636.3 billion in the first half of 2024 (1H24), as reported by the Central Bank of Sri Lanka (CBSL).

 This improvement is primarily attributed to the accumulation of foreign assets, as outlined in the CBSL’s latest Monetary Policy report.

The report highlights that the NFAs of licensed commercial banks (LCBs) improved due to an increase in foreign assets, coupled with the settlement of foreign currency exposures to non-residents. 

The Central Bank’s NFAs also experienced growth, primarily through net purchases of foreign exchange from the domestic market. This increase was bolstered by enhanced performance in the external sector, leading to an improvement in Sri Lanka’s gross official reserves.

In 2023, NFAs saw a significant positive shift of Rs. 1.3 trillion, a sharp contrast to the Rs. 785 billion contraction observed in 2022.

Additionally, credit extended to the private sector grew by approximately Rs. 146 billion during 1H24, marking a 6.2% year-on-year increase by the end of June 2024.

 While much of this credit expansion was consumption-driven, there was also notable growth in credit provided to other sectors of the economy.

On the government front, net credit to the government (NCG) by the banking system contracted by Rs. 196 billion during 1H24. 

This contraction was primarily due to a decrease in NCG by the Central Bank, driven by the maturity of treasury bills and a reduction in the use of the standing lending facility (SLF) by LCBs. 

However, NCG by LCBs saw an increase, reflecting their growing investments in government securities.

Furthermore, credit extended to state-owned business enterprises (SOBEs) by LCBs contracted by Rs. 60.4 billion in 1H24. This reduction was largely due to net repayments by major SOBEs and the valuation impact of the rupee’s appreciation during this period.

Over the past two years, leading up to April 2024, Sri Lanka’s banking system has accumulated reserves or repaid debt amounting to 6.2 billion US dollars. This accumulation followed measures to curb inflationary pressures by halting money printing and preventing artificially low-interest rates.

In April 2022, Sri Lanka defaulted on its debt, ceasing repayments on bilateral and private loans. The savings from these deferred repayments, from April 2022 to March 2024, amount to 5.8 billion US dollars. 

However, the Central Bank continued to borrow from the Reserve Bank of India and printed money to manage interventions, delaying a swift balance of payments correction.

 Despite these challenges, the Central Bank has since adopted a deflationary policy, rebuilding reserves while private credit contracted. By April 2022, negative reserves had ballooned to 4.8 billion US dollars.

The International Monetary Fund has asked for a recapitalization plan for the central bank after an extension of maturities of central bank held Treasuries to meet the lender’s gross financing need (GFN) targets led to valuation losses.

“After assessing the impact of the DDO on the CBSL’s balance sheets, done in close consultation with external auditors and IMF staff and by applying good accounting standards and valuation frameworks, the government should stand ready to inject capital into the CBSL, as soon as fiscal buffers allow it, so as to reach positive equity from 2025, which would increase to 2 percent of GDP by 2031.”

Based on longstanding principles before inflation and peacetime currency collapses became routine from the last century with the defeat of sound money by state-run central banks running on Anglo-American post-Keynesian inflationist doctrine, note-issue banks typically bought 90 to 95 day bills, generally known as the ‘bills only policy’, analysts say.

During a special media briefing, Cabinet Spokesman and Minister Bandula Gunawardena addressed misconceptions regarding the Government’s recent decisions, particularly about the International Monetary Fund (IMF) agreement and the upcoming Budget. The briefing aimed to clear up public misunderstandings about the country’s financial commitments and constraints.

The Minister explained that under the Extended Fund Facility with the IMF, the Government has secured funds to support the Budget through 2025-2027, and the salary proposals will not be revised within this period. Gunawardena stressed that any future government must adhere to these agreements.

Despite economic challenges, the Government has already granted a Rs. 10,000 allowance to public servants, with further relief promised as the economy recovers. A special committee was appointed by President Ranil Wickremesinghe to address wage disparities among public sector employees, and its recommendations will be implemented in the 2025 Budget. 

This includes a 24% to 35% salary increase for all public sector employees starting January 2025, and an increase in the cost-of-living allowance to Rs. 25,000 for three years, with the minimum monthly salary for the lowest-ranking Government employee expected to reach Rs. 55,000.

The Government faces a Budget deficit estimated at $5.018 billion for the coming year. To address this, the IMF will provide $700 million, with additional support from the World Bank ($400 million) and the Asian Development Bank ($300 million). The total projected debt relief amounts to $3.655 billion.

As preparations for the 2025 Budget continue, the Government seeks input from other political parties on their economic plans for governing the country from January 2025. 

Gunawardena underscored the importance of this year’s Budget process, especially with the upcoming Presidential election on September 21, and noted that financial provisions must be allocated within 100 days as required by the Constitution.

August 21, Colombo (LNW): Showers or thundershowers will occur at times in Western, Sabaragamuwa, Southern and North-western provinces and in Kandy and Nuwara-Eliya districts. Fairly heavy showers above 75 mm are likely at some places in Western and Sabaragamuwa provinces and in Galle and Matara districts.

Showers or thundershowers will occur at several places in Eastern, Uva and North-Central Provinces during the evening or night.

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

The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.

By: Staff Writer

August 20, Colombo (LNW): In a move aimed at enhancing professional standards and increasing accessibility in the capital market industry, the Securities and Exchange Commission (SEC) has issued a Directive that provides new entry requirements and exemptions for its certification programs.

This Directive which came into effect from 1 August contains new entry requirements designed to better serve aspiring and current investment advisors by aligning educational and professional requirements with industry best practices and emerging market trends.

The SEC develops and administers professional education and Continuous Professional Development (CPD) programs as a part of Sri Lanka’s capital market licensing framework. The licensing processes is crucial to uphold high standards of professionalism and trust in the financial advisory sector, thereby protecting investors’ interests and enhancing the stability of financial markets.

The SEC administers the Certificate in Capital Markets (CCM) program, which is the only pathway to obtaining the Registered Investment Advisor (RIA) Qualification and is designed to provide comprehensive education and training for professionals in Sri Lanka’s capital market.

Relaxation of the entry requirements for CCM is expected to make it easier for a wider range of candidates to participate in this crucial program.

Previously, candidates seeking to register for the CCM were required to hold either 3 passes for Advanced Level (A/L), a completed degree or a completed professional qualification in any discipline.

 The new entry criteria now recognises a broader range of academic and professional qualifications allowing more individuals to pursue the certification program.

Additionally, to accommodate various professional backgrounds and prior learning experiences, the SEC has broadened the exemption policy for CCM.

Previously, the SEC only granted exemptions for candidates who had passed Level 2 of Chartered Financial Analyst. However presently, candidates who are passed finalists of Chartered Institute of Management Accountants (CIMA),

Association of Chartered Certified Accountants (ACCA), Institute of Chartered Accountants of Sri Lanka (CA) and candidates who have completed a Bachelor’s or a Master’s Degree in a finance related discipline can apply for exemptions as well.

Moreover, the eased minimum entry requirements and updated exemption policy apply to single asset class certification programs as well.

The first batch of the CCM program, featuring the revised entry requirements and exemptions, is set to begin on 31 August.

Comprehensive details are available on the SEC website www.sec.gov.lk. This launch represents a significant step forward in offering accessible, high-quality certification opportunities for capital markets professionals.

These revisions are designed to elevate the standards of the industry while making it more inclusive and supportive of ongoing professional growth.

August 20, 2024 – Jaffna: In a powerful and strategic move, Hon. Vijayakala Maheswaran, Former Member of Parliament, Former State Minster for Education, Women and Child Affairs and Chief Organiser of the United National Party (UNP) for Jaffna and Killinochi Districts, has officially kicked off her campaign in support of His Excellency President Ranil Wickremesinghe across the Jaffna and Killinochi districts. With the Northern and Eastern Provinces set to play a decisive role in the upcoming presidential election, Maheswaran’s campaign is gathering unprecedented momentum, signaling an imminent and overwhelming victory for President Wickremesinghe.

Unwavering Support Across the North and East

Vijayakala Maheswaran has boldly declared that President Ranil Wickremesinghe will secure at least 90% of the votes cast in the Northern and Eastern Provinces on September 21st. This is not an idle claim but a reflection of the deep-rooted trust and confidence that the people of these regions have in President Wickremesinghe’s leadership.

It is essential to recognize that the strong support which Sajith Premadasa received in the 2019 presidential election in these provinces was largely due to the influence of Ranil Wickremesinghe, who, as the then leader of the UNP, laid the groundwork for a broad coalition of support. Now, with President Ranil Wickremesinghe himself leading the charge, there is no doubt that the people of the North and East will rally behind him, ensuring a decisive and historic victory.

A Turning Point for the Northern and Eastern Provinces

The upcoming presidential election is a defining moment for the Northern and Eastern Provinces. These regions, which have long sought stability, development, and genuine representation, see in President Wickremesinghe a leader who not only understands their unique challenges but has the proven capability to address them. His administration has consistently demonstrated a commitment to peace, reconciliation, and economic development, and the people are ready to reaffirm their trust in his leadership.

Vijayakala Maheswaran’s campaign is not just about securing votes; it is about galvanizing the people of the North and East around a shared vision for a prosperous and peaceful future under President Wickremesinghe. Her extensive grassroots outreach and deep connections within the community make her a formidable force in mobilizing support, ensuring that every vote cast in these regions contributes to a landslide victory.

The Critical Role of the Northern and Eastern Votes

The votes from the Northern and Eastern Provinces are set to be a critical factor in this election. These regions have historically played a pivotal role in shaping the outcome of national elections, and this time will be no different. The people of the North and East are fully aware of the stakes and are prepared to deliver a resounding mandate for President Wickremesinghe, whose leadership they trust to bring about lasting change and progress.

A Vision for a United and Prosperous Sri Lanka

President Ranil Wickremesinghe’s vision for Sri Lanka is one of unity, stability, and prosperity for all its citizens. His leadership has been a beacon of hope for the entire nation, and the people of the Northern and Eastern Provinces are ready to stand with him as he continues to lead Sri Lanka towards a brighter future.

Vijayakala Maheswaran’s campaign is a testament to the enduring strength of this vision and the unwavering support it commands across the country. As the campaign gains momentum, it is clear that the Northern and Eastern Provinces will play a crucial role in delivering a historic victory for President Wickremesinghe on September 21st.