April external sector aptly demonstrated Sri Lanka’s over-reliance on imports for basic needs such as food, power and energy, and transport as expenditure on such categories stood out stubbornly high, making a strong case for the country to change its track if it is to emerge out of the current economic crisis, the worst in its post-independence history.
Worker remittances to Sri Lanka recovered from April levels, but still stand significantly below what the country received a year ago, reflecting the lingering challenges facing the authorities in restoring confidence in getting expatriates to use the official banking channels more when repatriating their moneys, which will directly help to import food, fuel, cooking gas and medicines.
Ending weeks of speculation, business tycoon Dhammika Perera yesterday resigned from the director boards of a number of listed companies he controls, where he served in the capacity of Chairman or Co-Chairman, to make way for his entry into politics.
Sri Lanka’s power sector regulator, the Public Utilities Commission of Sri Lanka (PUCSL) stressed that it would not allow the Ceylon Electricity Board (CEB) to enter into power purchase agreements (PPAs) with the private sector developers, including India’s Adani Group, violating the least cost principle.
Prime Minister Ranil Wickremesinghe in his capacity as the Finance Minister has requested International Monetary Fund (IMF) Managing Director Kristalina Georgieva Tuesday evening to expedite the process of staff-level agreement, which would then pave the way for the rescue package at least by September.
Presenting what appears to be a comprehensive reform package, Prime Minister Ranil Wickremesinghe yesterday charted a three-phased path for the country to emerge from the current economic abyss caused by the pandemic, which was then compounded by extremely poor economic management.
The Central Bank yesterday said the daily guidance rate released on the exchange rate between the United States dollar and Sri Lankan rupee is delivering the intended results by way of bringing in greater stability to the domestic foreign exchange market, which otherwise would have delivered disastrous implications, due to the rupee’s free fall.
Taking a swipe at Prime Minister Ranil Wickremesinghe’s repeated comments to the effect of the government having to rely on printed money to pay for essential government bills such as payment of salaries and pensions in the ensuing months, the former Central Bank Deputy Governor, Dr. W.A. Wijewardena likened it to giving sugar to a diabetes patient, to reflect the severity of the move in aggravating the current problems in the economy.
Shrugging off concerns raised by various parties that the restrictions imposed on Open Account Payment Terms would lead to a large-scale shortage of essential food items, the Central Bank yesterday assured the public that it would ensure availability of foreign exchange through the banking system for the importation of essential goods, including food items.
The hard-hit tourism sector has formulated a strategy document, the ‘Revival for Survival’ plan, to help support the industry through the ongoing economic crisis and move towards a positive work trajectory at the earliest.
Following the conclusion of the IMF Staff virtual mission to Sri Lanka, the multilateral lender yesterday said Sri Lanka needs to restore debt sustainability prior to any kind of lending to the crisis-stricken island nation.
Sri Lanka’s new Prime Minister Ranil Wickremesinghe, who was also appointed as the country’s Finance Minister yesterday, said he would present an interim budget within six weeks, slashing infrastructure projects to reroute the funds into a two-year relief programme for the crisis-hit island nation.
With State-owned Ceylon Petroleum Corporation (CPC) struggling to finance fuel imports amid steep losses, Sri Lanka has returned to a cost-reflective fuel pricing formula partially ending an uneven subsidy regime after over two years, resulting in a record increase in fuel prices
Despite the multiple challenges from fuel and power shortages to social unrest, Sri Lanka’s merchandise exports set a new record in April, recording the highest ever export value for the month supported by the floating of rupee exchange rate in the previous month.
The Planters Association of Ceylon yesterday expressed fear in the fate of Ceylon Tea being similar to that of the tourism sector, as the relevant authorities continue to fail to acknowledge, let alone manage the hardships faced.
The Colombo bourse bounced back yesterday strongly on the back of renewed optimism amid prospects for political stability in the country with the appointment of United National Party Leader Ranil Wickremesinghe as the new Prime Minister.
Re-channeling foreign exchange flows into the formal banking sources alone could solve the bulk of the problems in the domestic foreign exchange market liquidity as over 25 percent of foreign currency transactions take place outside the banking system, according to the Central Bank Governor.
The Central Bank yesterday made a fervent appeal from all elected representatives, including Executive President Gotabaya Rajapaksa, to make way to establish political stability, rule of law and civic order immediately, to ensure that people’s economic sufferings wouldn’t worsen anymore.
After two years of massive budget deficits, Sri Lanka is on its way to record another blowout budget deficit in the current year, with the deficit estimated for 2022 at 10.2 percent of gross domestic product (GDP), the estimates by the Central Bank showed.
As matters are becoming increasingly ugly between the Sri Lanka Tourism leadership and private sector stakeholder, the Tourism Ministry has sternly requested the two parties to immediately put a stop to the public mudslinging.
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