Page 31 - Sri Lanka

Lack of independence at Central Bank led to Sri Lanka's bankruptcy

The governor of the Central Bank of Sri Lanka Nandalal Weerasinghe has cited the lack of independence of the apex bank in determining the monetary policy as a reason for the country's unprecedented economic crisis. The Sri Lankan government in May last year declared a debt default on over USD 51 billion in foreign loans -- a first in the country's history. Weerasinghe made the statement on Thursday while talking about a proposed bill aimed to provide autonomy to the Central Bank without any undue influence from the fiscal authorities or the government. "In 2020, 2021 and 2022, the policy interest and exchange rates were fixed without the Central Bank," Weerasinghe said. The exchange rate was fixed at Rs 203 leading to the total loss of our reserves and bankruptcy, he said, recalling the situation prevailing at the time of his takeover last year from his predecessor Ajith Cabraal. He said it was important to let the Central Bank act independently to determine the policy interest ra

India continues to support debt-ridden Sri Lanka, distributes ration

India, under its 'Neighbourhood First' policy, has always come forward to help debt-ridden Sri Lanka, and in the latest instance has distributed the ration in Kalmunai, the Indian High Commission said

Sri Lankan unions end strike after President Wickremesinghe offers talks

Sri Lanka's state-sector trade unions on Wednesday called off their daylong strike to protest against the envisaged tax reforms after President Ranil Wickremesinghe pledged to give them an opportunity to discuss the issue with the IMF which has set this as a precondition for a crucial bailout package. The trade unions of doctors, ports, banks, electricity and teachers observed a day-long strike with the hope to convert it to a continuous protest action. They want the government to roll back the high personal taxes which the government had claimed was a necessity as part of the reforms demanded by the IMF to unlock the USD 2.9 billion bailout package. President Wickremesinghe's secretary Saman Ekanayake in a letter sent today to the doctors' trade union said: The Hon President has directed me to inform you that he wishes to continue the dialogue with the trade unions to resolve the issues An opportunity would be provided to the trade unions to discuss tax reforms with the IMF," he

South Asia gets back to reality

The crises in Sri Lanka and Pakistan raise questions about the relevance and costs of reliance on the alternative financial system provided by China's Belt and Road Initiative

Government workers in Sri Lanka stage protest over income tax hike

Sri Lankan health, railway, port and other state workers were on a daylong strike Wednesday to protest against sharp increases in income taxes and electricity charges, as the island nation awaits approval of an International Monetary Fund package to aid its bankrupt economy. Most government hospitals around the country suspended their outpatient clinics because doctors, nurses and pharmacists were on strike. The railways operated fewer trains and armed soldiers guarded carriages and train stations fearing sabotage. Trade unions say the increase in taxes and electricity charges have hit them hard amid difficulties from the country's worst economic crisis. They have threatened to extend the strike indefinitely if the government fails to address their demands. The government says it was compelled to raise taxes to strengthen state revenue and electricity charges to cover production costs, key prerequisites to unlocking the proposed USD 2.9 billion IMF package. Authorities say they ...

India secure WTC final berth after New Zealand beat Sri Lanka in thriller

India on Monday qualified for the prestigious World Test Championship (WTC) final after New Zealand defeated Sri Lanka by two wickets in a thrilling last-ball finish in the Christchurch game. India will play Australia in the WTC final at The Oval from June 7. This is India's second successive entry into the WTC final, with the previous one coming in the inaugural cycle in 2021, where they lost to New Zealand. With the Dimuth Karunaratne-led side's only shot at the WTC final berth hinging on a 2-0 victory against the Kiwis in the away series, the loss for the Islanders ended their hopes of securing a spot. Australia was the first team to secure a WTC final berth after humbling India by nine wickets in the third Test of the Border-Gavaskar series at Indore, leaving the hosts praying for a favourable result in the first Test between New Zealand and Sri Lanka. The result in Christchurch took the fourth Test of the Border-Gavaskar series in Ahmedabad out of the equation as earlier Indi

Sri Lanka uses Indian financial aid to buy textbooks for 4 mn students

Sri Lanka has used over USD 10 million from India's assistance of USD 1 billion to print nearly half of the textbooks for its four million young students, the Indian High Commission here said on Saturday. India announced a USD 1 billion line of credit to Sri Lanka last year as part of its financial assistance to help the country deal with its economic crisis. After an agreement to extend the line of credit was inked, Ministry of External Affairs (MEA) Spokesperson Arindam Bagchi had said India has always stood with the people of Sri Lanka and will continue to extend all possible support to the country. A concessional credit facility of USD 1 billion was extended to the Government of Sri Lanka by the Government of India in March 2022 for supply of essential items including food, fuel, medicines, industrial raw materials. Out of this facility, over USD 10 million has been used by SPC and private importers to procure printing paper and material from India, the High Commission here ...

Sri Lanka adopts first national action plan on women, peace and security

Battered by a series of crisis over the year, including war, Covid-19 pandemic and economic calamity, Sri Lanka adopted its first National Action Plan on Women, Peace and Security (WPS)

IMF board to consider approval of Sri Lanka's bailout package on March 20

The International Monetary Fund (IMF) has said that Sri Lanka has received financial assurances from all major bilateral creditors, Sri Lanka-based Daily Mirror reported

Sri Lanka secures China assurances to clear way for $2.9 bn IMF bailout

China has given assurances that it will support Sri Lanka's debt restructuring, clearing the biggest hurdle for the debt-ridden country to secure a much-needed USD 2.9-billion bailout package from the IMF, President Ranil Wickremesinghe said on Tuesday. In January, India strongly backed the island nation's efforts to secure a loan from the global lender to recover from its worst-ever economic crisis. Last night we received a new letter from the EXIM Bank of China. I and the governor of the Central Bank signed our letter of intent and sent it to the International Monetary Fund (IMF) last night itself," Wickremesinghe, who is also the minister of finance, told Parliament. Wickremesinghe said, our part of obligations are now complete and we hope the IMF will do their duty by the third or fourth week of this month, this will enable us to receive funding from the world bank and the ADB, he added. The IMF bailout process made slow progress due to the need to restructure Sri Lanka's nearl

A suggestion to the IMF on inflation

Standard policies towards inflation have not helped. It is important to think out of the box

Sri Lanka to hold election after getting Treasury's guarantee on funds

Sri Lanka's election commission on Monday said that the new date for the cash-strapped country's local election will be announced after receiving a guarantee from the Treasury on the funds required to hold it. The local body polls scheduled for March 9 were postponed due to a plethora of reasons linked to the country's current economic crisis. We have asked to meet the Treasury Secretary, the inspector general of police and the government printer," the chair of the independent Election Commission Nimal Punchihewa said on Monday. The new date will be announced with a guarantee from the Treasury on the money required to hold it. The meeting follows last week's order by the Supreme Court on the Secretary Treasury to release the budgetary allocation made for conducting of the poll for 340 local councils in the 2023 budget. The election to appoint new administrations to 340 local councils for a four-year term has been postponed since March last year due to the ongoing economic crisis.

India, Sri Lanka mulling over using Indian Rupee for economic transactions

India and Sri Lanka are exploring the possibility of using the Indian Rupee for economic transactions and have discussed the initiative that will help in building a stronger and closer partnership through trade and investment-led measures between the two countries. The High Commission of India here organised a discussion on the use of the Indian Rupee (INR) for transactions between India and Sri Lanka on Thursday. "Representatives from the Bank of Ceylon, State Bank of India and the Indian Bank shared their experiences and informed the audience that they had started carrying out INR-denominated trade transactions through respective Vostro/Nostro accounts after the creation of enabling framework by the Reserve Bank of India (RBI) and the Central Bank of Sri Lanka (CBSL) in 2022," the High Commission said in a statement. The participating banks also outlined the benefits of settlements denominated in INR which includes shorter timelines, lower exchange costs and easier availability of

EAM S Jaishankar, Ali Sabry discuss Sri Lanka's economic recovery

External Affairs Minister S Jaishankar on Saturday held wide-ranging talks with his Sri Lankan counterpart M U M Ali Sabry focusing on facilitating Sri Lanka's economic recovery as well boosting bilateral trade. India extended financial assistance worth around USD 4 billion to Sri Lanka, including lines of credit for purchases of food and fuel, last year when it was reeling under a severe economic crisis. New Delhi also provided guarantees to the International Monetary Fund (IMF) to help the country secure a USD 2.9 billion bailout package. "Nice to catch up FM @alisabrypc of Sri Lanka. Thank him for his #RaisinaDialogue2023 participation," Jaishankar said on Twitter. "We took stock of our cooperation that is focused on facilitating Sri Lanka's economic recovery. Discussions covered investment, trade and development partnership," he said. Sabry described the meeting as "constructive". "I met with @DrSJaishankar, Minister of External Affairs of India at Hyderabad House during my .

Sri Lanka's central bank ready to adopt IMF programme within March

There have been some differences between the CBSL and IMF staff on the inflation outlook, CBSL Governor Nandalal Weerasinghe said

Lanka's central bank raises interest rates in anticipation of IMF bailout

Central bank Governor P Nandalal Weerasinghe said with the rate increase all "prior actions" have been fulfilled and he was hopeful of the IMF bailout being approved within this month

State Bank of India completes first commercial trade in Sri Lankan rupees

The move comes as Sri Lanka grapples with its worst economic crisis since its independence, triggered by a shortage of dollars

World Bank assures support to Sri Lanka's development reform programme

The World Bank assured its support to development reform programme of Sri Lanka, which is going through its worst-ever economic crisis in the history

India, Sri Lanka review security cooperation at annual defence dialogue

Top defence officials of India and Sri Lanka have held the seventh edition of their annual dialogue during which the two sides reviewed the bilateral defence and security cooperation and identified new avenues for engagement. The two-day meeting of the 7th edition of the Annual Defence Dialogue (ADD) between India and Sri Lanka, which began in New Delhi on Thursday was chaired by Defence Secretary Giridhar Armane and his Sri Lankan counterpart General Kamal Gunaratne. During the meeting which ended on Saturday, the two sides reviewed the defence and security cooperation, the Indian High Commission said here. Various ongoing defence cooperation initiatives were jointly reviewed and new avenues for engagement were identified during the ADD, it said. Sri Lanka's delegation included Air Marshal SK Pathirana, Commander of Sri Lanka Air Force along with senior officers from the Sri Lanka Army and the Navy. The Indian delegation included officials from the Ministry of Defence, Headquarte

Sri Lanka's body approves renewable energy projects of Adani group

Sri Lanka's investment promotion body has approved two renewable energy projects of India's Adani group to be set up in the north and eastern regions of the island nation at a total investment of USD 442 million. The wind power plant in Mannar will operate at a capacity of 250 MW (megawatt) while the wind power plant in Pooneryn will operate at a capacity of 100 MW. The Board of Investment of Sri Lanka has issued a letter of approval to India's Adani Green Energy Limited, for the two wind power plants to be set up in Mannar and Pooneryn at a total investment of USD 442 million," a release said on Thursday. The two wind power plants of 350 MW are scheduled to be commissioned in two years and they will be added to the national grid by 2025. The new project will generate 1500-2000 new employment opportunities. Early this week, the Adani Group representatives met the minister of Energy Kanchana Wijesekara to check on the progress of the two projects. This was the first official meeti