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Tuesday November 29th, 2022

CID to take over the investigation into the Police shooting case in Angulana

ECONOMYNEXT- Police have arrested 14 people who staged a protest outside the Angulana Police station yesterday, July 16, and allegedly stoned the building.

The Police Media Division said that they have detained 5 men and 9 women while a total of 8 police officers have sustained injuries due to the clash.

The protest was prompted by the shooting death of a 39-year-old local fisherman allegedly by officers of the Angulana Police Station during a spot-check at a roadblock in Lunawa, Moratuwa.

The three police officers involved in the shooting were interdicted following an investigation by the Acting IGP.

The case filed over the killing was to be taken up before the Moratuwa Magistrate’s Court yesterday when the two main witnesses were taken by the police early morning.

Speaking to media, the mother of the victim said that several police officers arrived in a vehicle and had taken away the two main witnesses of the Lunawa shooting incident at around 5 am yesterday morning.

In protest of this, the relatives of the shooting victim as well as a large number of villagers had gathered in front of the police station and commenced an agitation which had later had gone out of control.

Villagers said that the two witnesses had been taken to Mount Lavinia and Moratumulla police stations before they were brought back to the Angulana police station by the officers.

Later, in the evening a number of residents in the area gathered in front of the police station had again engaged in a protest, which became tense as they petted stones and other objects causing damages to the police station.

Special Task Force (STF) and the Riot Police could be seen being deployed later in the evening covering the entire area to control the situation. Further, at the court’s session yesterday, the court ordered that investigations into the shooting incident to be handed over to the Criminal Investigations Department (CID).

Police Media Division also said that the arrested protestors will be produced before the Moratuwa Magistrate today. (Colombo, July 17, 2020-sb)

Reported by Imesh Ranasinghe

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A new Sri Lanka monetary law may have prevented 2019 tax cuts?

ECONOMYNEXT – A new monetary law planned in 2019, if it had been enacted may have prevented the steep tax cuts made in that year which was followed by unprecedented money printing, ex-Central Bank Governor Indrajit Coomaraswamy said.

The bill for the central bank law was ready in 2019 but the then administration ran out of parliamentary time to enact it, he said.

Economists backing the new administration slashed taxes in December 2019 and placed price controls on Treasuries auctions bought new and maturing securities, claiming that there was a ‘persistent output gap’.

Coomaraswamy said he keeps wondering whether “someone sitting in the Treasury would have implemented those tax cuts” if the law had been enacted.

“We would never know,” he told an investor forum organized by CT CLSA Securities, a Colombo-based brokerage.

The new law however will sill allow open market operations under a highly discretionary ‘flexible’ inflation targeting regime.

A reserve collecting central bank which injects money to push down interest rates as domestic credit recovers triggers forex shortages.

The currency is then depreciated to cover the policy error through what is known as a ‘flexible exchange rate’ which is neither a clean float nor a hard peg.

From 2015 to 2019 two currency crises were triggered mainly through open market operations amid public opposition to direct purchases of Treasury bills, analysts have shown.

Sri Lanka’s central bank generally triggers currency crises in the second or third year of the credit cycle by purchasing maturing bills from existing holders (monetizing the gross financing requirement) as private loan demand pick up and not necessarily to monetize current year deficits, critics have pointed out.

Past deficits can be monetized as long as open market operations are permitted through outright purchases of bill in the hands of banks and other holders.

In Latin America central banks trigger currency crises mainly by their failure to roll-over sterilization securities. (Colombo/Nov29/2022)

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Sri Lanka cabinet clears CEB re-structure proposal: Minister

ECONOMYNEXT – Sri Lanka’s cabinet has cleared proposals by a committee to re-structure state-run Ceylon Electricity Board, Power and Energy Minister Kanchana Wijeskera said.

“Cabinet approval was granted today to the recommendations proposed by the committee on Restructuring CEB,” he said in a message.

“The Electricity Reforms Bill will be drafted within a month to begin the unbundling process of CEB & work on a rapid timeline to get the approval of the Parliament needed.”

Sri Lanka’s Ceylon Electricity Board finances had been hit by failure to operate cost reflective tariffs and there are capacity shortfalls due to failure to implement planned generators in time. (Colombo/Nov28/2022)

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Sri Lanka new CB law to cabinet soon as IMF prior action

ECONOMYNEXT – Sri Lanka’s new central bank law will be submitted to the cabinet as a prior action of International Monetary Fund with clauses to improve governance and legalize ‘flexible’ inflation targeting, Central Bank Governor Nandalal Weerasinghe said.

Under the new law members of the monetary board will be appointed by the country’s Constitutional Council replacing the current system of the Finance Minister making appointments.

“It will be a bipartisan approach,” Governor Weerasinghe told an investor forum organized by CT CLSA Securities, Colombo-based brokerage.

“The central bank’s ability to finance the budget deficit will be taken out. Thirdly the flexible inflation targeting regime will be recognized in the law as the framework.”

The law will also make macro-prudential surveillance formally under the bank.

There will be two governing boards, one for the management of the agency and one to conduct monetary policy.

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