An Echelon Media Company
Wednesday June 7th, 2023

Bohra Conference to draw 25,000 visitors to Sri Lanka

 ECONOMYNEXT- The Bohra Global Conference 2019 will bring as many as 25,000 tourists to Sri Lanka from September 01 to 10, boosting post-Easter Sunday tourism, a minister said.

“As many as 25,000 Bohras will travel from over 40 countries,” Tourism Development Minister John Amaratunga said.

“This will help re-establish Sri Lanka as a safe destination,” he said.

“The endorsement we receive from the event being held here is crucial,” he said.

Amaratunga said that Bohra Global Conference is the largest international event to be held in Sri Lanka, and will generate at least 50 million US dollars in foreign exchange through hotel bookings, excursions and shopping.

It is also the largest event to be hosted in the capital Colombo in recent times, he said.

Tourist arrivals to Sri Lanka in August are expected to fall only 12.7 percent to 175,000 visitors, recovering from a 70.8 percent plunge in May just after the bombings.

Processes at the airport are being revamped to handle the sudden influx of 25,000 people, Amaratunga said.

“We need to ensure there are short queues. The airport is the first impression a visitor has of the country.”

The free visa program which nationals from 48 countries are eligible for is being expanded to include all countries for the Bohra conference delegates, Amaratunga said.

The religious event will take place from September 01 to 10 at Sri Lanka’s Bohra Headquarters in Bambalapitiya, but some delegates have already started arriving, he said.

Over 600,000 meals will be served at the event over the 10 days, Amaratunga said.

“Hotels in Colombo are fully booked for the duration of the event,” he said.

“Around 3,000 hotel rooms are booked in formal sector,” he said.

Most of the visitors are staying in informal sector, which many hotels are trying to regulate further through lobbying.

“They are fanatically looking for accommodation in the informal sector hotels, and even apartments not registered with SLTDA,” Amaratunga said.

“Some have booked in Negombo, Ratmalana and Mount Lavinia,” he said.

Sri Lanka Tourism Promotions Bureau Managing Director Chamalie Maelge said that visitors have booked hotels on the coastal areas running from Negombo in Colombo’s north to the city of Galle in Sri Lanka’s south.

“They will commute, taking advantage of the highways,” she said.

“The last time they held the conference, I was in Beruwala, and all the hotels in the area were fully booked,” she said.

Around 12,000 Bohras had arrived when the conference was last held in Sri Lanka in 2007.

The event is being held in Sri Lanka for the sixth time.

Amaratunga said that negotiations were tough to retain the business with Sri Lanka after the Easter Sunday attacks.

“It took a long time to convince them of the security situation.”

“It was a battle and was worth having it, to show that Sri Lanka is absolutely safe to travel to.”

“Intelligence services say that there is no imminent threat.”

Amaratunga said that all government authorities and service providers should work to ensure that the event goes off perfectly. (Colombo/Aug22/2019)

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Sri Lanka’s shares slip on profit taking and selling pressure

ECONOMYNEXT – Sri Lanka’s shares closed lower on Wednesday after four consecutive gains in previous sessions spiraled into selling interest and profit taking, an analyst said.

The main All Share Price Index was down 0.28 percent or 24.39 points to 8,722.06, this is the lowest the index has been since May 02, while the most liquid index S&P SL20 was down 0.40 percent or 9.92 points to 2,468.44.

“The market was gaining in the previous sessions and there is selling and profit taking present today, due to continuously being on green,” an analyst said.

In the previous sessions the market was seeing gains, due to lowered policy rates and low inflation stimulating buying interest and driving the sentiment up, an analyst said.

Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier according to a revised Colombo Consumer Price Index calculated by the state statistics office.

The central bank cut the key policy rates by 250 basis points to spur a faltering economic growth as inflation was decelerating faster than it projected.

“There are gradual improvements in the market sentiment, with positive sentiments coming in from lowered policy rates and inflation,” an analyst said.

The market generated foreign inflows of 12 million rupees and received a net foreign inflow of 18 million rupees, due to low share prices and discounted shares followed by a dividend announcement.

The market generated a revenue of 554 million rupees, this is the lowest the turnover has been since May 10, while the daily turnover average was 1 billion rupees. From the total generated revenue, the banking sector contributed 120 million rupees, Diversified Banks contributed 115 million rupees and the Capital Goods Industry generated 78 million rupees.

Top losers during trade were Sampath Bank, Commercial Bank and Aitken Spence. (Colombo/June06/2023)

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Sri Lanka Treasuries yields plunge, 12-month down 318bp

ECONOMYNEXT – Sri Lanka’s Treasuries yields plunged across maturities at Wednesday’s auction with the 12-month yield falling 318 basis points, in one of the biggest one day falls, data from the state debt office showed.

The 3-month yield fell 244 basis points to 23.21 percent.

The 6-mont yield fell 339 basis points to 21.90 percent, along with the 12 months to 19.10 percent.

The short-term yield curve is inverted.

The central bank last week cut its policy rate 250 basis points in a signaling move but is not printing money to enforce the rate cut.

The debt office sold all 140 billion rupees of offered securities. (Colombo/June07/2023)

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Sri Lanka forex reserves rise US$722mn in May 2023

ECONOMYNEXT – Sri Lanka’s foreign reserves grew 722 million US dollars to 3,483 million US dollars in May 2023 from 2,761 million US dollars in April, official data showed amid weak credit and better inflows.

Sri Lanka lost almost all its reserve in over two years as the central bank sold reserves and printed money to keep rates down (sterilized reserves sales) including borrowed dollars from India.

Gross official reserves fell to a low of 1,705 million US dollars in September 2022.

Sri Lanka’s central bank hiked rates in April 2022 to slow credit and also stopped printing money after it ran out of borrowed Asian Clearing Union dollars from India.

Sri Lanka’s gross official reserves are made up of both monetary reserves of the central bank and any balances of the Treasury account from loans or grants it gets.

The central bank’s net foreign reserves are still negative after busting up borrowed reserves to suppress rates. By April (before the collection of reserves in May) the central bank’s net reserves were negative by 3.7 billion US dollars.

In May alone 662 million US dollars were bought from the market, Central Bank Governor Nandalal Weerasinghe said.


No pre-determined level to stop Sri Lanka rupee appreciation: CB Governor

Borrowing dollars through swaps and busting them up, was invented by the US Federal Reserve as it was printing money and breaking the Bretton Woods system in the early 1970s.

Sri Lanka received a 350 million US dollar tranche from the Asian Development Bank and 331 million US dollars from the IMF to the Treasury for budget support.

The loans can be sold to the central bank by the government to generate rupees and spend. However, since credit is weak, not all the inflows go out of the country particularly as the central bank is conducting deflationary open market operations on a net basis.

By allowing the rupee to appreciate unlike in previous episodes of recovery in an IMF program, after a bout of money printing, the central bank is bringing down inflation – in some cases absolute prices – and restoring confidence and easing the ‘pain’ of ‘monetary policy’ or stimulus.


Why is Sri Lanka’s rupee appreciating?

Though exports are falling, tourism revenues are also picking up.

The budget support loans, tourism receipts less the reserve collected will widen the trade deficit. Building foreign reserves involves lending money to the US or other western nations and is similar to repaying foreign debt. (Colombo/June07/2023)

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