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Wednesday September 27th, 2023

Cash-strapped Sri Lanka’s cabinet panels meet to find alternative importing methods

ECONOMYNEXT – Sri Lanka’s cabinet sub committees appointed to find way forward to to manage imports from China, Japan, and Middle East met for the first time and explored other methods of importing essential food items, raw materials and industrial goods required for the export-oriented industries amid dollar shortage.

Sri Lanka’s severe dollar shortage has forced the island nation’s central bank to impose ban of several import goods and seek for credit line. India has already given a 1.5 billion US dollar credit line to import fuel, essential foods and medicines.

The three Cabinet Sub Committees, which were appointed by President Gotabaya Rajapaksa last month to negotiate with China, Japan, and the Middle East region on economic matters met for the first time in the parliament last week, the government said in a statement.

The committees met under the Chairmanship of the Foreign Minister G L Peiris.

Cabinet Ministers Bandula Gunawardena, Namal Rajapaksa, Ali Sabry, Ramesh Pathirana and Johnston Fernando, are the members of the Sub Committees.

“The Cabinet Sub Committee on China was briefed on the current progress related to the ongoing negotiations in respect of the proposed China – Sri Lanka Free Trade Agreement, while the Committee agreed to fast-track the possible next steps in consultation with the relevant stakeholders at the earliest,” the government said.

“The Sub Committees have directed the relevant officials to obtain a list of urgent requirements from all Ministries and agencies, which Sri Lanka may solicit from partner countries, to achieve economic stability and quick progress.”

Sri Lanka has been looking to curb imports to preserve US dollars, but the imports hit three-year high as the central bank failed to allow a floating exchange rate under a record low interest rate regime amid excess money printing.

The central bank finally last week allowed flexible exchange rate after raising the key monetary rates by 200 basis points this year. Since then the rupee has plunged around 32 percent and hit a fresh record low on Friday. (Colombo/March13/2022)

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Sri Lanka to introduce social security system: minister

ECONOMYNEXT – Sri Lanka’s Labour minister has said that they are set to introduce a comprehensive national social security system, covering all workers.

“The system will address the weaknesses of the current system and provide much-needed support to workers and their families,” Manusha Nanayakkara, Minister of Labour and Foreign Employment said on X (formerly known as Twitter).
He did not specify the details.

Nanayakkara also spoke of the need for robust social security when he met with exporters last week to discuss labor law reforms, boosting female workforce participation and attracting FDI.

Sri Lanka plans to reform labour laws for an export-oriented economy.

The pandemic and the economic crisis highlighted the need to improve the coverage of social security.

Studies have shown that Sri Lanka’s women are kept out of formal employment by childcare, elderly care and housework, as day care and elderly homes are either too expensive or too few.

The government imposed a Social Security Contribution Levy to increase its revenue last year. (Colombo/Sep27/2023)

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Sri Lanka’s stocks up in trading on Wednesday morning

ECONOMYNEXT – Sri Lanka shares were picking up in trading on Wednesday morning.

Turnover was at 50 million. Trading in the Capital Goods Industry Group was driving turnover.

The All Share Price Index was up 0.37 percent or 41.78 points to 11,289.94, while the S&P SL20 was also up 0.68 percent or 21.66 points to 3,187.65.

Hatton National Bank, Commercial Bank and LOLC saw gains in morning trade, while Tokyo cement and Lanka Hospitals were trading down during morning trading. (Colombo/Sep27/2023)

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Sri Lanka rupee opens at 323.50/324.10 to the US dollar, bond yields stable

ECONOMYNEXT – Sri Lanka’s rupee opened at 323.50/324.10 to the US dollar on Wednesday, after closing on Tuesday at 323.70/324.20 to the US dollar, dealers said.

A bond maturing on 01.08.2026 was quoted at 15.50/70 percent on Wednesday up from Tuesday’s close at 15.45/65 percent.

A bond maturing on 01.05.2028 was quoted at 14.50/55 percent from closing at Tuesday at 14.30/55 percent. (Colombo/Sep27/2023)

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