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Wednesday February 1st, 2023

No snap polls until Sri Lanka’s economic crisis is resolved – President

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe promised not to dissolve the parliament and hold a snap poll until the island nation’s economic crisis is resolved and bring change the youth-protesters wants amid opposition criticism over the government dragging elections.

Wickremesinghe, who became the president in July in an unexpected way, can dissolve the parliament after February next year.

The country’s Election Commission has said it could hold the local government polls after February 20, but Wickremesinghe’s government has appointed a three-member committee to look into delimitation which is changing the boundaries of electorates.

Political analysts say a snap poll next year could lead to a hung parliament and reverse proposed reforms necessary to go with a $2.9 billion International Monetary Fund loan needed to move away from the current unprecedented economic crisis.

“I will not be dissolving the Parliament. The economy is in a massive problem and once that is resolved we can go for election,” Wickremesinghe told the parliament.

Sources close to President Ranil Wickremesinghe said that he is likely to hold presidential elections first before any other polls. The government has to go for local government polls by March next year, but the government has appointed a new commission to look into electorate boundaries, a move seen by opposition as a delaying tactics.

Related: Sri Lanka’s Wickremesinghe likely to go for presidential poll first – sources

Related: Sri Lanka has no decision to delay local polls, but “adjustments” needed – minister

Sri Lanka had mass protests against economic mismanagement by then government led by former president Gotabaya Rajapaksa. Later, the youth led protests, ousted Rajapaksa and his government in July after the country defaulted sovereign debt following a currency collapse, heavy money printing, and wrong economic policies.

The youth-led protesters started the agitation against high cost of living, shortage of essentials, and food shortage under ex-President Rajapaksa.

President Wickremesinghe has invited youth interested in politics to join the government as a pledge to anti-government protestors who demanded more youth representation in the Parliament and government.

“I have asked for the names of the youth who are interested in entering politics. I would like the five names before the end of December and they must be appointed by January because we are here to make a change,” he said.

“Whenever I go for gatherings it’s the same old faces and there is nothing new, no new ones. Youth want a change and after we achieve that then we will go for an election,” said Wickremesinghe.

Sri Lanka’s opposition parties and many protestors who led the ousting of Rajapaksa are now demanding both the local government and parliamentary polls citing that the present government has no mandate to be in power as its failed economic policies have forced the people to oust them. (Colombo/Nov23/2022)

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Sri Lanka bond yields down at close

ECONOMYNEXT – Sri Lanka’s bond yields were down at close following a bond auction on Wednesday, dealers said while a guidance peg for interbank transactions remained unchanged.

“The rates were steady at the auction,” a dealer said.

“This can be a signal to the market saying the rates will go down in the future.”

A bond maturing on 01.07.2025 closed at 32.40/60 percent, down from yesterday’s 32.60/85 percent.

A bond maturing on 01.05.2027 closed at 29.10/35 marginally down from yesterday’s 29.20/75 percent.

The Central Bank’s guidance peg for interbank US dollar transactions remained unchanged at 362.14 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 371.38 rupees on Friday, data showed. (Colombo/Feb 01/2022)

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Sri Lanka bill auction hits pothole after 2025 bond spike

ECONOMYNEXT – Sri Lanka sold only 45 billion rupees in Treasury bills at Wednesday’s auction after offering 120 billion rupees, data from the state debt office showed, amid market confusion over a spike in a two year bond at an earlier action.

30.1 billion rupees of 3-month bills were sold at 29.91 percent, unchanged from a week earlier after offering 60 billion rupees for auction.

5.1 billion rupees of 6-month bills were sold at 28.72 percent, flat after offering 30 billion.

10.3 billion rupees of 12-month bills were sold at 27.72 percent after offering 30 billion.

Phase II subscriptions have been opened.

The market was foxed after the 2025 bonds were accepted at sharply higher yield than market on January 30, dealer said.

There was further confusion as the there was an outright purchase of 2025 at around 29 percent earlier in January.

Some investors speculated that the authorities were trying to drive more buyers towards short end bonds as bill volumes were getting larger. (Colombo/Feb01/2023)

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Sri Lanka services exports down 5.9-pct in 2022

ECONOMYNEXT – Sri Lanka’s services exports were estimated to have fallen 5.9 percent to 1,876.3 million US dollars, the island’s Export Development Board said.

Services exports estimated is made up of ICT/BPM, construction, financial services, transport and logistics.

There are more than 500 ICT companies, the EDB said.

Sri Lanka’s merchandise exports were up 4.6 percent to US dollars 13.1 billion dollars in 2022 from 2021.

Sri Lanka’s goods exports are slowing amid lower growth in Western markets. (Colombo/ Feb 01/2023)

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