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Thursday December 1st, 2022

EU election observation mission launched; 80 observers in total

Thirty long-term observers (LTOs) were deployed in all nine provinces of Sri Lanka this morning as part of a European Union Election Observation Mission (EU EOM) tasked with monitoring the upcoming presidential election.

This is the EU’s sixth election observation mission in the country, having monitored presidential and parliamentary elections from 2000 to 2015, on the invitation of the Election Commission of Sri Lanka. Notably, the EUM claims that it is totally independent of the EU delegation to Sri Lanka and the Maldives.

According to the mission’s Deputy Chief Observer Dimitra Ioannou, the LTOs will meet a “wide range of election stakeholders in their [respective] areas and begin sending first-hand accounts from the field soon.”

A press release said the EOM will carry out a comprehensive election assessment, focusing on the legal framework, electoral administration, voter registration, campaigning, conduct of the media including social media, voting, counting and tallying, and the transmission of results. The mission will remain in Sri Lanka “well beyond election day” to observe any appeals or complaints, it added.

A core team of nine experts have been on the island since 11 October, according to the EOM, and they along with the LTOs will be joined by 30 short term observers as well as a delegation of seven EU parliamentarians, bringing the mission strength to a total of some 80 observers.

Speaking to reporters in Colombo today, Deputy Chief Observer Ioannou said all EOM observers are bound by a strict code of conduct.

“The first important thing to know is the EU EOMs are completely independent and impartial, and all our observers abide by a code of conduct which stipulates that we maintain strict neutrality in the course of our work and that we do not interfere in the electoral process. The EOM does not legitimise any part of the electoral process, nor does it validate the election result,” she said.

Emphasising its independence, Ioannou said: “Although operating under the EU flag, in our assessment of the process, we are completely independent of the EU delegation to Sri Lanka and the Maldives, EU member states and all EU institutions.”

The 2019 EU EOM to Sri Lanka is led by EU Member of Parliament Marisa Matias of Portugal.

No findings have been made so far and, notably, the EOM will not make its findings public until election day. A press conference two days after election day will see Chief Observer Matias present what the mission calls a preliminary statement to the media, whether or not election results have officially been announced by then. Matias will subsequently return to Sri Lanka some two months after the election with a final report, complete with recommendations for improvements to the electoral process.

The last EU mission that was in Sri Lanka to observe the 2015 parliamentary elections, said Ioannou, had made 26 recommendations, out of which three were fully implemented. These were the establishment of the Election Commission as per the constitutional amendment, continued voter education projects and training of election staffers, and a 25% quota for women.

“There are also some other recommendations that are partly reflected in the process, but we hope that this time we will manage to produce a number of comprehensive recommendations that the Election Commission, the Parliament, civil society and political parties will take into consideration,” she said.

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Sri Lanka’s inflation eases to 61-pct in November

ECONOMYNEXT – Sri Lanka’s 12-month inflation in the capital Colombo fell to 61 percent in November 2022 from 66 percent in October as price stabilized after interest rates were allowed to go up and the exchange rate was pegged around 360 to the US dollar.

The widely watched Colombo Consumer Price Index fell absolutely 0.5 percent to 242.6 points in November after falling .04 percent in the October.

Food prices fell 1.5 percent after falling 2.0 percent a month earlier. The sub-index containing gas fell 0.5r percent and transport fell 3.6 percent.

But some services continued to go up, as relative prices adjusted to the steep fall in the currency after two years of money printing to suppress rates.

Health costs went up 5.7 percent. Furnishing and routine maintenance rose 0.4 percent.

Sri Lanka’s central bank hiked policy rates to 15.5 percent in April and pulled back on longer term money printing, allowing market rates to go to around 30 percent.

The exchange rater is pegged around 363 rupees with a surrender rule where banks are forced to sell dollars to the central bank for new liquidity.

The ongoing currency and inflation crisis is the worst in the history of the central bank.

Sri Lanka’s Latin America style central bank was set up in 1950 giving powers to the country’s macro-economists the power to mis-target rates, create currency crisis and high inflation. (Colombo/Nov30/2022)

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Sri Lanka shares close at one-month high

ECONOMYNEXT – Sri Lanka shares closed at one month high on Wednesday gaining for the fourth session on news that government is in talks with ADB and World Bank to get a 1.9 billion dollar loan facility, brokers said.

The main All Share Price Index (ASPI) closed 3.3 percent or 276.02 points higher at 8,651.23, highest index gain in since November 01.

“Investor participation improved on the back of confirmed talks with multilateral and bilateral lenders including world banks and ADB for USD 1.9Bn after IMF board level agreement is reached,” First Capital Market Research said in it’s daily note.

Former Central Bank Governor Indrajit Coomaraswamy said in a forum on Monday that the government is in discussion with ADB and World Bank to get loans of 1.9 billion US dollars after a reform program with International Monetary Fund is approved

A policy loan now being discussed with the World Bank may bring around 700 million US dollars, Coomaraswamy told a business forum organized by CT CLSA Securities, a Colombo-based brokerage.

The Asian Development Bank may also give around 1.2 billion US dollars most of which will be budget support, he said.

The market witnessed a turnover of 3.3 billion rupees, higher than this year’s daily average turnover of 2.9 billion rupees. This is the highest turnover generated since October 04.

In the last few sessions market gained after Central bank governor said market rates should eventually ease despite the fears of a domestic debt restructuring as inflation falls, increased liquidity in dollar markets, and the inter-bank liquidity improves.

In the past sessions, the index continued to fall on the speculation of a local debt restructuring although no proper decision has been taken so far.

The market saw a foreign inflow of 39 million rupees. The total net foreign inflow stood at 18.33 billion rupees so far for this year.

The more liquid index S&P SL20 closed 3.4 percent or 89.78 points higher at 2,730.08.

The ASPI has fallen 0.5 percent in November after losing 13.4 percent in October.

It has lost 29.2 percent year-to-date after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.

Sampath Bank pushed the index up to close at 10.9 percent to 36.6 rupees.

Other top gainers were Browns Investment gained 15.4 percent to close at 7.5 rupees and LOLC gained 9.4 percent to close at 411.3 rupees.(Colombo/Nov30/2022)

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Sri Lanka bonds, T-bills ease, overall market dull

ECONOMYNEXT – Sri Lanka’s treasury bonds eased and T-bill yields fell on the speculation on talks with ADB and World Bank to obtain financial aid but the over all market was dull on Wednesday while the Central Bank’s guidance peg remained unchanged, dealers said.

“During the day, secondary market witnessed some buying interest on the back of speculations on yields easing while talks about financial aid from ADB and World Bank further strengthened interest,” First Capital Market Research said in it’s daily note.

A bond maturing on 01.05.2024 closed at 32.00/60 percent on Wednesday, down from 32.30/90 percent on Tuesday.

A bond maturing on 07.07.2025 bond closed at 30.80/31.30 percent up from 30.30/31.25 percent on Tuesday.

A bond maturing on 15.05.2026 closed at 31.00/30 percent down from 31.10/31.30 percent on Tuesday.

The three-month T-bills closed at 32.30/33.25 percent, down from 32.60/33.00 percent.

The Central Bank’s guidance peg for interbank transactions remained unchanged at 363.19 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers between 371.79 and 372.10 for small transactions, data showed.

Buying rates are between 361.79 – 362.00 rupees. (Colombo/Nov 30/2022)

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