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Tuesday December 5th, 2023

Crisis has only economic solution, not political solution: Minister

ECONOMYNEXT – Addressing the prevailing crisis of the country requires a focus on economic solutions, and political measures would be inadequate, minister of transport, highways and mass media, Bandula Gunawardena said.

“The existing national debt stands at approximately 36 billion US dollars. Only 37 percent of this debt is slated for payment within the next 5 to 6 years,” Gunawardena said at a media briefing at the presidential media centre on Wednesday.

“51 percent of the loan amount scheduled for repayment between 6 and 20 years. The remaining 12% is earmarked for settlement after the 20-year mark.

“Irrespective of the governing party, the country is obligated to service this debt until the year 2048. Failure to meet these financial commitments would result in a governing party’s ability to administer the government for only a two-week duration.”

Avoiding loans from global entities and defaulting on payments poses a critical challenge, as the current international system relies on this financial mechanism, Gunawardena pointed out.

“Refusal of other nations to accept letters of credit issued by Sri Lanka would hinder the importation of vital commodities such as petroleum, gas, medicines and essential food items.

“Consequently, political solutions prove ineffective in addressing this predicament; instead, the imperative lies in implementing an economic solution to navigate through these challenges.

To navigate the country out of the current crisis, a strategic approach involves focusing on four key aspects, Gunawardena said.

“Firstly, there is an imperative to enhance government revenue. Secondly, it is essential to curtail both recurrent and capital expenditures of the government.

“The third element involves boosting foreign exchange inflows while concurrently minimizing foreign exchange outflows. Lastly, the goal is to establish a current account surplus in the balance of payments.

“The budget presented by the President for the year 2024 is aligned with these crucial objectives.”

Following the budget, the International Monetary Fund is expected to issue the second loan tranche.

“Successful refinancing of the debt would provide ample resources to execute all the proposals outlined in the budget. Subsequently, the revival of all stalled development projects becomes feasible.” (Colombo/Nov16/2023)

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Sri Lanka finding ways to clear 1.1mn pending cases: Justice Minister

ECONOMYNEXT – Sri Lanka is taking a series of steps to speed up 1.1 million pending court cases and encourage alternative dispute solving mechanisms, Justice Minister Wijedasa Rajapakshe said.

“The delay in court cases is a serious problem,” Minister Rajapakshe told a briefing at the President’s Media Centre.

“We have already taken several steps to expedite cases.”

There were 5,680 cases in Supreme Court, 4,054 in the Court of Appeal, 6,168 in the High Court of Civil Appeal, 8,363 in the Commercial High Court, 28,000 in the High Court, 254,000 in District Courts and 791,000 in Magistrates Courts.

In 2015, only 49 percent of complaints to mediation boards were resolved. Following reforms, the ratio has been increased to 70 percent.

The value of disputes going to mediation board has been raised to one million rupees from 500,000 rupees.

To solve land problems in the post-war period, special mediation boards on property was set up in the North and the East.

Mediation boards on property will be set up in another 16 districts.

Commercial High Courts were increased to four from three.

Another Commercial High Court will be set up in the future. The consideration of cases that can go to a High Court was raised from 4 million rupees to 10 million rupees.

A commercial dispute resolution law will be introduced next January.

A small claims court has been established.

Case involving disputes below 2 million rupees can be directed to small claims court.

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Sri Lanka stocks close up as some investor interest returns

ECONOMYNEXT – The Colombo Stock Exchange closed up on Monday, CSE data showed.

The All Share Price Index was up 0.22 percent, or 23.33 points, at 10,743.59.

The S&P SL20 index was up 0.68 percent, or 20.60 points, at 3,067.73.

Turnover was at 708 million. The banks sector contributed 189 million, while the food, beverage and tobacco sector contributed 176 million of this.

Sri Lanka’s stock market has seen some investor interest return after last week’s news that the country had managed an agreement on a debt restructuring deal with an official creditor committee, and foreign funds for some development projects resumed.

Top positive contributors to the ASPI in the day were Sampath Bank Plc (up at 71.50), LOLC Holdings Plc (up at 379.00), and Commercial Bank of Ceylon Plc, (up at 90.90).

There was a net foreign outflow of 52 million.

Citrus Leisure Plc, which announced that its banquet hall and revolving restaurant at the Lotus Tower would launch on or around Dec 9, saw its share price rise to 6.20 rupees. (Colombo/Dec4/2023).

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Sri Lanka rupee closes broadly steady at 328.10/30 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 328.10/30 to the US dollar on Monday, from 328.00/10 on Friday, dealers said.

Bond yields were stable.

A bond maturing on 01.06.2025 closed at 13.70/14.00 percent from 13.70/95 percent.

A bond maturing on 01.08.2026 closed at 13.90/14.10 percent from 13.90/14.05 percent.

A bond maturing on 15.01.2027 closed at 14.00/14.10 percent from 14.05/10 percent.

A bond maturing on 01.07.2028 closed at 14.20/35 percent from 14.15/25 percent.

A bond maturing on 15.05.2030 closed at 14.25/45 percent, from 14.20/45 percent.

A bond maturing on 01.07.2032 closed at 14.05/40 percent, from 14.00/45 percent. (Colombo/Dec4/2023)

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