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Monday April 15th, 2024

Sajith calls for National effort to save the country’s economy

Sri Lanka opposition leader Sajith Premadasa

ECONOMYNEXT – Leader of the Opposition Sajith Premadasa is calling on all political parties to shed their differences and come together to pull the country out of its current economic morass.

In a statement released yesterday September 29, Premadasa pointed to the downgrading of Sri Lanka by Moody’s which he said would make debt on the international market more expensive and harder to obtain for Sri Lanka.

“Because of the downgrade interest rates we have to pay for Bonds and loans will go up and it will be very hard for us to raise money for ourselves even to pay our loans,” he said.

“The downgrading is an indication that the level of trust that the international community has in us has fallen,” Premadasa said in the address released on video.

He said the proposal to remove auditors oversight over government institutions and the abolishing of the Procurement Commission contained in the proposed 20th Amendment to the Constitution has caused this loss in investor confidence.

“With this proposal, we are sending a wrong signal to the international community,” he warned.

“If investors have no confidence in the country they will not come here and that will have a direct adverse impact on economic growth,” the leader of the main opposition Samagi Jana Balavegaya said.

We are a country that is facing a debt crisis. Our people need to know that from 2021 until 2025 we have to pay between USD4bn and USD5bn each year as loan repayments.

Because of the downgrade, Premadasa warns we will have to go to “Blackmarket lenders who will give us loans at very high rates.”

This raises the prospect that we as a nation can become bankrupt.

He said that if we have to draw on our foreign reserves then we have to limit imports which will also have an impact on economic growth and even our own exports.

“Our country has fallen into an economic situation which is very serious,”

“What is needed is a democratic solution and a better macroeconomic management policy. This must aim at providing sustainable solutions for the country’s most serious problems” he added.

“In order to do that we as a nation must come together casting aside political and other divisions so that we can escape a deathly economic trap we may fall into,” he proposed. (Colombo September 30, 2020)

Reported by Arjuna Ranawana

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Sri Lanka to discuss two contentious points with bondholders: report

ECONOMYNEXT – Sri Lanka and sovereign bondholders are to discuss two matters in the near future which the two sides failed to reach agreement at March talks in London, a media report quoting a top aide to President Wickremesinghe as saying.

Sri Lanka and bondholders had discussed four matters on restructuring international sovereign bonds in late March and agreement had been reached on two, President’s Chief of Staff Sagala Ratnayake was quoted as saying on state-run ITN television.

A restructuring proposal by bondholders was not in line with IMF requirements, and Sri Lanka had sent a counter proposal, he said.

The matters will be discussed at round of talks in the near future.

Sri Lanka was optimistic of reaching an agreement with the bondholders before June, officials have said.

According to matters already in the public domain, sovereign bond holders are keen to get a bond tied to dollar gross domestic product, as they feel IMF growth projections are too low.

In past re-structuring so-called value recovery instruments, a type of warrant, gave their owners extra payments if a country did better than expected and were tied to items like oil prices.

Bondholders had initially proposed bond which would have a lower hair cut initially, and it will have additional hair cuts if growth is low (about 3.1 percent) as projected in an IMF debt sustainability analysis. (Colombo/Apr15/2024)

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BIMSTEC Secretary General visits Sri Lanka, discusses regional cooperation

ECONOMYNEXT – The Secretary General of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), discussed measures to enhance regional cooperation, during his visit to the island last week.

Ambassador Indra Mani Pandey, Secretary General of BIMSTEC visited Sri Lanka from 07 – 12 April 2024, following his assumption of office as Secretary General of BIMSTEC in January this year.

The Secretary General “met with senior officials of relevant Ministries/Agencies to discuss measures to enhance regional cooperation under various BIMSTEC initiatives,” the Foreign Ministry said in a statement.

Several BIMSTEC countries have bilateral trade agreements, such as Sri Lanka and India, Thailand and Myanmar, Sri Lanka and Thailand, but no collective regional agreement to enable intra-regional leverage.

During the visit, Secretary General Pandey held discussions with Ministry of Foreign Affairs officials and paid courtesy calls on the President and the Minister of Foreign Affairs.

Secretary General Pandey participated at an event on “Regional Cooperation through BIMSTEC” organized by the Lakshman Kadirgamar Institute (LKI) on 9 April. (Colombo/April15/2024)

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Sri Lanka rupee closes weaker at 299.00/10 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 299.00/10 to the US dollar in the spot forex market on Monday, from 298.50/55 on Wednesday, dealers said, while bond yields were broadly steady.

A bond maturing on 15.12.2026 closed stable at 11.30/35 percent.

A bond maturing on 15.09.2027 closed stable at 11.90/12.00 percent.

A bond maturing on 15.12.2028 closed at 12.10/20 percent up from 12.10/15 percent.

A bond maturing on 15.09.2029 closed stable at 12.20/40 percent. (Colombo/Apr15/2024)

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