Page 2 - Srilanka Emergency

Sri Lanka's inflation zooms to 69.8% in Sept amid worst economic crisis

Sri Lanka's inflation has set a new record of 69.8 per cent in September, up from 64.3 per cent a month earlier, data from the state statistics office said on Friday, highlighting the challenge for the central bank as the island reels under its worst economic crisis in seven decades. The Colombo Consumer Price Index (CCPI), a leading indicator that gauges inflation in Sri Lanka's biggest city, rose 69.8 per cent from a year ago, from 64.3 per cent in August. The contribution from the food sector was 30.82 per cent in September, the statistics department said. Based on the CCPI, the moving average inflation in September was 33.4 per cent over 28 per cent recorded in August. Most basic food items other than rice and eggs had seen increases. The government recently hiked utility services rates of water and electricity alongside the high cost of food. Import restrictions imposed in the ongoing economic crisis have caused scarcities. The worsening foreign exchange crisis in April cau

Lankan govt designates high-security zones for ensuring stability: Official

The Sri Lankan government on Monday defended its decision to declare several key locations in Colombo as high-security zones, saying the move is aimed at ensuring stability and not curbing freedom of expression, amid mounting criticism from rights groups. Sri Lankan President Ranil Wickremesinghe on Friday declared several locations, including Parliament, the Supreme Court complex and the President's Secretariat among others, as high-security zones (HSZs), banning any kind of protest or agitation in their vicinity. HSZs are nothing new. We saw how the Presidential Secretariat came to be surrounded by groups recently. They blocked officials from functioning. If the main place where key decisions are made is blocked, we have to take decisions to prevent it, said Kamal Gunaratne, the secretary to the ministry of defence. Sri Lanka's Presidential Secretariat was stormed in July by a sea of anti-government protesters who had been demanding former President Gotabaya Rajapaksa's resignatio

Bhutan reopens to those willing to pay $200 per day visitor tax: Report

Bhutan has increased its Sustainable Development Fee from $65 a night as part of a "renewed focus of sustainability" in the government's strategy to attract "high value, low volume" tourism

Fallen Rajapaksas back Wickremesinghe as Lanka's creditors seek answers

Much has changed since demonstrators drove Gotabaya Rajapaksa from office in July, the climax of months of protests after record-high inflation and depleted currency reserves bankrupted the nation

Crisis hit-Sri Lanka to brief creditors on IMF deal for economic recovery

The Sri Lankan government will virtually brief all its external creditors on September 23 on the deal agreed with the International Monetary Fund (IMF) for the economic recovery and the next steps in the debt restructuring process. On September 1, the IMF reached a staff-level agreement to support Sri Lanka's economic policies with a 48-month arrangement under the Extended Fund Facility (EFF) of about USD 2.9 billion. Sri Lanka is going through its worst economic crisis since its independence in 1948 which was triggered by a severe paucity of foreign exchange reserves. "Sri Lanka will make an online presentation to external creditors on September 23 updating them on a deal agreed with the International Monetary Fund and recent economic developments," Clifford Chance, the debt restructuring adviser, said in a statement on Saturday. The Sri Lankan Finance Ministry will update creditors on recent macro-economic developments, the objectives of the IMF package, and the next steps in th

India emerges as Sri Lanka's top lender in 2022, think tank report says

India has emerged as the top lender to Sri Lanka in 2022, disbursing USD 377 million in loans to the island nation as it grappled with an unprecedented political crisis and economic turmoil, according to the Verite Research think-tank. The Asian Development Bank follows India with USD 360 million in loans. They account for 76 per cent of total disbursements from January to April 2022. Out of a total disbursement of loans amounting to USD 968 million in the first four months this year, India with a contribution of USD 377 million has emerged as Sri Lanka's largest bilateral lender, Verite Research, a Colombo-based independent interdisciplinary think-tank providing strategic analysis and advice for governments and the private sector in Asia, said. Between 2017 and 2021, China has been the largest bilateral lender to Sri Lanka. In 2021, China had provided USD 947 million of which USD 809 million were borrowings from the China Development Bank. The ADB has been the largest multilateral

Sri Lanka's GDP likely plunged amid debt crisis, political turmoil

Gross domestic product probably fell 10% in the three months to June from a year ago, according to a Bloomberg survey of economists as of Wednesday

Lazard in talks with China, India, Japan on restructuring Sri Lanka's debt

The three countries hold about $13 billion of Sri Lanka's debt, while China is Sri Lanka's largest bilateral creditor

Sri Lanka's economic crisis powers 22% spike in Indian orthodox tea exports

Sri Lanka accounts for half the global trade in orthodox teas. Sources say exports from India could pick up further in second and third quarters, will help meet target of 240 mkg by year-end

US to give $40 mn agricultural aid to Sri Lanka for next cultivation season

The United States on Saturday announced USD 40 million in aid to buy fertilizer and other key agricultural inputs in time for the next cultivation season in crisis-hit Sri Lanka. USAID Administrator Samantha Power, who is visiting Sri Lanka, made the announcement after she met farmer representatives in Ja-Ela outside the capital, Colombo. She said the money will be in addition to the $6 million announced earlier to assist low income farmers. Sri Lanka is facing its worst economic crisis and acute shortages of essentials like food, fuel and medicines because of a lack of foreign currency to pay for the imports. Agricultural yields dropped by more than half for the past two cultivation seasons because authorities had banned the imports of chemical fertilizers ostensibly to promote organic farming. The farmers that I just met with described enormous challenges that the economic crisis has placed on them and their families and the whole community. They described phenomena that were ...

Sri Lanka's former finance minister Basil Rajapaksa leaves for US: Reports

Sri Lanka's former finance minister Basil Rajapaksa left for the US on Friday to receive medical treatment, a week after the Supreme Court allowed him to travel overseas until January 15, media reports said. Basil Rajapaksa, the younger brother of ousted president Gotabaya Rajapaksa, left for Dubai on an Emirates flight from Katunayake Airport, from where he will catch a connecting flight to the US, Daily Mirror Lanka newspaper reported, quoting officials. On September 2, Sri Lanka's Supreme Court's five-bench headed by Chief Justice Jayantha Jayasuriya permitted Basil, 71, to travel overseas, until January 15 next year to receive medical treatment. The Supreme Court made this order in connection with a Fundamental Rights petition filed by Sri Lankan swimmer and coach Julian Bolling, former Chairman of the Ceylon Chamber of Commerce Chandra Jayaratne, Transparency International and Jehan Canaga Retna, the Mirror report said. The petitioners are seeking an order to take legal action

US to participate in Sri Lanka's debt restructuring to help revive economy

The US has agreed to cooperate with Sri Lanka's debt restructuring as prescribed by the IMF in its staff-level agreement for a USD 2.9 billion bailout package to help revive the country's ailing economy. US Treasury Secretary Janet Yellen informed Sri Lankan President Ranil Wickremesinghe that the US as a creditor country would participate in the country's debt restructuring. The US has pledged to continue to engage with other government agencies -- the World Bank and the Asian Development Bank (ADB). Wickremesinghe's office said the US treasury department had welcomed the government's decision to seek IMF assistance. On September 1, the IMF reached a staff-level agreement to support Sri Lanka's economic policies with a 48-month arrangement under the Extended Fund Facility (EFF) of about USD 2.9 billion. Sri Lanka is going through its worst economic crisis since its independence in 1948 which was triggered by a severe paucity of foreign exchange reserves. Commenting on the US' ...

IMF chief pleased that Sri Lanka reached staff-level deal for $2.9 billion

The IMF chief Kristalina Georgieva on Sunday said she is pleased the Washington-based lender and the Sri Lankan government have reached a staff-level agreement to provide about USD 2.9 billion to help the bankrupt country, terming the deal as an important step forward. The International Monetary Fund (IMF) on Thursday announced that it will provide Sri Lanka a loan of about USD 2.9 billion over a four-year period to help the island nation overcome the unprecedented economic turmoil. The bailout package is expected to boost the country's credit ratings and the confidence of international creditors and investors. Very pleased that IMF staff and Sri Lankan government officials have reached a staff-level agreement to support the country's economic policies with a 48-month Extended Fund Facility of about USD 2.9 billion, Georgieva said in a tweet. This is an important step forward for Sri Lanka, she added. The new Extended Fund Facility (EFF) arrangement will support Sri Lanka's progra

With no immunity, Sri Lanka's ousted prez Rajapaksa faces legal troubles

Sri Lanka's ousted President Gotabaya Rajapaksa, who returned home after seven weeks in exile following protests over economic hardships, could face legal action over forced disappearances of activists now that he has been stripped of constitutional immunity, a lawyer said Saturday. Rajapaksa flew to Colombo around midnight Friday from Thailand and was escorted under military guard to his new home in the capital. He has no pending court cases because he was protected by constitutional immunity as president. A corruption case against him during his time as a top defence official was withdrawn soon after he was elected in 2019. However, Rajapaksa will be served a summons next week to appear at the Supreme Court, where his immunity from testifying on the forced disappearance of two young political activists is challenged, said lawyer Nuwan Bopage, who represents the victims' families. He said Rajapaksa fled the country when he was about to be served a summons in July. The disappearanc

Sri Lanka parliament passes 2022 interim budget with 120 votes, 5 opposed

Sri Lanka's Parliament passed the interim budget presented by President Ranil Wickremesinghe for 2022 on Friday, a day after the IMF announced it will provide a loan of about USD 2.9 billion to help the crisis-hit country tide over its worst economic hardships. The budget was passed with only 5 members voting against it. Three legislators from the Janatha Vimukthi Peramuna (JVP) and two MPs from the All Ceylon Tamil Congress voted against the interim budget. A total of 115 members in the 225-member assembly voted in favor while the main opposition SJB abstained from voting. Wickremesinghe aimed for tax reforms while allowing relief to the most vulnerable groups affected by the ongoing economic crisis in the island nation. The interim budget introduced a number of tax reforms pertaining to income tax, value added tax (VAT), telecommunication levy and betting and gaming levy. VAT rate will be increased to 15 per cent from the current rate of 12 per cent with effect from September 1 t

IMF may make formal announcement on SL's bailout package tomorrow: Reports

The visiting IMF delegation is expected to conclude talks with the Sri Lankan government and make a formal announcement on Thursday on the much-awaited bailout package and staff-level agreement for the cash-strapped island nation, media reports said on Wednesday. Sri Lanka is going through its worst economic crisis since its independence in 1948 which was triggered by a severe paucity of foreign exchange reserves. The second such visit from the International Monetary Fund (IMF) in three months comes at a time when Sri Lanka is scrambling to chalk out a staff-level agreement with the Washington-based global lender for a USD 5 billion programme, which could be the antidote for the country's current economic travails. "The IMF Mission in Colombo has been extended by one day because discussions are still ongoing with the authorities, Colombo Page news portal reported, quoting Senior Mission chief Peter Breuer, as saying. Breuer, who is an expert in debt restructuring, said his team pla

Sri Lanka president raises IMF loan hopes, budget aims to bolster revenue

Sri Lanka's talks with the IMF on a bailout package have made solid progress, its president said

Crisis-hit Sri Lanka to privatise national carrier as it runs out of money

Sri Lanka on Monday said it will privatise the country's loss-making national carrier as the cash-strapped government "can no longer afford to inject money" into running the airline. The government is looking to sell a 49 per cent stake each of the SriLankan Airlines' catering and ground-handling units in efforts to restructure the state-run carrier, while 51 per cent will be retained under state hold, Aviation Minister Nimal Siripala de Silva told reporters here. This restructuring is essential as the government can no longer afford to inject money into running the airline, he said. Annually the government has been providing the airline between USD 80 billion to USD 200 billion to run its operations, de Silva said. The minister said the revenue from the sale of the catering operation can be used to pay off debt amounting to USD 80 million that was obtained by mortgaging its shares, as well as some other loans. The airline's debt currently amounts to USD 1.226 billion (LKR 401 ...

India, 9 other countries eye Lankan market to sell petroleum items: Report

Sri Lanka's Ministry of Power and Energy has said that 24 companies from 10 countries, including India have evinced interest in selling petroleum products in the crisis-hit country's petroleum sector, according to media reports. Sri Lanka is in the midst of its worst economic crisis in decades, which is triggered by a severe paucity of foreign exchange reserves. Sri Lanka's Minister of Power and Energy Kanchana Wijesekera said that 24 companies from the United Arab Emirates, Saudi Arabia, the United States, China, India, Russia, the UK, Malaysia, Norway and the Philippines have submitted proposals for the Expressions of Interest (EOI) to engage in the country's petroleum sector, news portal Colombo Page reported on Sunday. In July, the Ministry of Power and Energy had called for EOI from established companies in petroleum producing countries using their funds for distribution and selling of petroleum products in Sri Lanka on a long-term basis. A ministry-appointed panel will now ..

'Ball in Sri Lanka's court', says China on debt restructuring request

China has said "the ball is in Sri Lanka's court" as it avoided giving a direct reply to the island nation's request of restructuring its debt, according to a media report here on Saturday. Sri Lankan has been urging China to restructure its debt as the nation continues to reel under acute economic crisis. It is estimated that Sri Lanka owes debt payments of USD 1.5 to 2 billion this year to China. Overall China's loans and investments in Sri Lanka were estimated to be more than USD eight billion in the last few years. But Beijing has not made a public commitment for debt relief assistance to Sri Lanka so far. Quoting a Chinese embassy spokesman, Daily Mirror news website reported that Beijing had communicated to the Sri Lankan Finance Ministry three months ago about its readiness to discuss how to address the debt issue with the Chinese banks. China encouraged its banks to discuss it. The Chinese position was also communicated during the telephone conversation between Chinese Prem