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Friday June 2nd, 2023

Sri Lanka acting president vows to restore 19th amendment, establish law & order

ECONOMYNEXT – Sri Lanka’s newly sworn in Acting President Ranil Wickremesinghe plans to facilitate a full restoration of the 19th amendment to the constitution and establish law and order in the face of what he calls an emerging fascist threat before parliament elects the next president.

In a recorded statement released shortly after his swearing in on Friday July 15, Wickremesinghe called for unity, consensus and prioritising the ongoing economic crisis over party politics.

“People expect a change in the political system. An important part of this change is restoring the 19th amendment fully. I have started the initial process of presenting a draft bill to parliament for this purpose.

“I will set the stage in this brief period for the new president elected next week to enact the 19th amendment,” he said.

Wickremesinghe did not indicate whether this meant the planned 22nd amendment will be amendment. The 19th amendment, originally enacted under his premiership in the Yahapalana government, somewhat significantly clipped the wings of Sri Lanka’s all-powerful executive presidency and strengthened parliament. The 20th amendment brought under former President Gotabaya Rajapaksa went beyond bringing back these powers, resulting in a weakened parliament.

The acting president said he will take immediate steps to establish law and order in the country. He had previously blamed “fascist” elements in Sri Lanka’s youth-led protest movement for inciting and causing violence. Protestors had been demanding the resignation of ex-President Rajapaksa since March, over his role in Sri Lanka’s worst economic crisis since Independence. Since some weeks into his appointment as prime minister, many of the protestor groups, collectively known as the aragalaya (or struggle), have been demanding Wickremesinghe’s resignation too. His private residence was burn down on July 09.

“I will take immediate steps to establish law and order in the country. I 100 percent accept the right to peaceful protest. But there are those trying to engage in sabotage. It has also been reported that some groups are trying to influence MPs in next week’s vote in parliament.

“We will create the space for MPs to independently express their views. They will be provided full security. We will not allow any group to destroy parliamentary democracy under any circumstance,” he said.

Sri Lanka’s parliament is expected to elect a new president from among its membership on July 20.

“There are groups that try to undermine democracy and set the country ablaze through fascist means. It’s groups like this that stole two weapons with ammunition from the army stationed near parliament. Twenty-four troops have been injured, two of them severely.

“I don’t believe real aragalya would do that. But there is a big difference between aragala protestors and rioters. Rioters will be dealt with under the law,” warned Wickremesinghe.

The acting president said those who have been with the argalaya from the start have also expressed their opposition to the violent elements.

“Together with them, we’re committed to upholding law and order and democracy. I’m committed to protecting the constitution, and I will never allow or abet anything that goes against the constitution. Nor will I work outside the constitution.

“A breakdown in law and order will impact the economy. Fuel, power and water supply and food supply can crumble,” he added.

Sri Lanka’s economic crisis is worsening, with shortages in fuel and other essentials as well as daily power outages have critically disrupted economic activity and heaped untold hardships on the public. Wickremesinghe made no mention of ongoing negotiations with the International Monetary Fund (IMF).

Meanwhile, protestors are threatening to up the ante in their demand for “Ranil go home”. Wickremesinghe believes that rogue elements within the aragalaya – whom he describes as fascists – are threatening to destabilise the country before the economy could recover. He has appointed a committee comprising military top brass to contain the situation.

“They have total freedom to take legal action with no political interference,” he said.

Wickremesinghe reiterated a call for an all-party government and urged all parties represented in parliament to arrive at a consensus on the matter as soon as possible.

“We must set aside party and political differences and unite for the country. So put your personal ambitions aside. Give priority to the needs of the country. Think more about protecting the country than about protecting individuals,” he said.

Who will be Sri Lanka’s ninth president is anybody’s guess. At this point, various contenders have expressed interest, opposition leader Sajith Premadasa among them. It may well end up being Wickremesinghe himself if the ruling Sri Lanka Podujana Peramuna (SLPP), which stall holds a majority in parliament, decides to vote for him come July 20.

“First we need a country to do politics. So I ask all political parties and groups to act with the country and the people in mind. First, let’s save the country and the people from this crisis situation. After that, we can get into party politics,” he said.

Wickremesinghe also announced two surprise decisions that have little to do with the present crisis: prohibiting the use of the words ‘his excellency’ when referring to the president and abolishing the presidential flag.

“A country only needs one flag; just the national flag. We must go forward under one flag,” he said.

He urged all parties and citizens to think deeply and impartially about the current crisis.

“The stage has been set for the country to embark on a new journey with a fresh approach. There is more space now for creating a society free of corruption and for uplifting our motherland. It is our duty to make the most of that,” he said.

“As citizens, let’s all be party to this,” he added. (Colombo/Jul15/2022)

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Sri Lanka to ramp up weekend fuel deliveries after petrol price cut

More deaths reported at Sri Lanka fuel queues

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Petroleum Corporation will be operating on the weekend to complete all fuel deliveries to end vehicle queues forming outside fuel stations after the price revision earlier in the week, Energy Minister Kanchana Wijesekera said.

“Instructions have been given to CPC and Ceylon Petroleum Storage Terminals to continue fuel deliveries on Saturday and Sunday this week to supply sufficient stocks to all fuel stations,” Minister Wijesekera said in a TWITTER.COM MESSAGE

“To reduce expenses on overtime, CPC and CPSTL have not been operating on Sundays and public holidays in the last 4 months,” Wijesekera said.

“Non-placement of orders by fuel stations from last Saturday, anticipating a price reduction, not maintaining minimum stocks, immediate increase in demand by consumers after the price revision, and quota increase have created shortages in the fuel stations.”

The Minister in April 2023 said all fuel stations would be required to maintain a minimum of 50 percent of stock tank capacity.

“I have asked CPC to review and suspend the license of fuel stations that had not maintained minimum stocks.” (Colombo/ June 02/ 2023)

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Sri Lanka bonds yield up at close, rupee at 291.75/292.50 against the US dollar

ECONOMYNEXT – Sri Lanka’s bonds closed steady on Friday, dealers said, following the central bank’s decision to cut its main policy rate by 250 basis points.

The Spot US dollar closed at 291.75/292.50 rupees, dealers said.

The rupee opened at 290.25/75 to the US dollar Thursday and closed at 292.50/295.50 to the US dollar.

A bond maturing on 15.09.2027 closed at 24.70/90 percent up from 24.50/90 percent a day earlier, dealers said.

A bond maturing on 15.05.2026 closed at 25.75/26.25 percent up from 25.00/26.00 percent a day earlier.

A bond maturing on 01.05.2025 closed at 27.00/30 percent, up from 26.30/27.00 per cent at last close.

A bond maturing on 01.07.2032 closed at 20.25/21.00 percent, up from 20.00/40 per cent at last close.
(Colombo/ June 02/2023)

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Sri Lanka’s shares edge up on positive macroeconomic sentiments

ECONOMYNEXT – Sri Lanka’s shares closed higher in trade on Friday, over positive macro-sentiments encouraging investors to redeem their interest towards buying, an analyst said.

The main All Share Price Index was up 0.72 percent or 62.19 points to 8,753.80,  while the most liquid index S&P SL20 was up 0.68 percent or 16.87 points to 2,487.29.

Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier according to a revised Colombo Consumer Price Index calculated by the state statistics office.

Prior to the Monetary Policy investors were quite optimistic that inflation is to lower and interest rates will decrease and since exp, an analyst said.

Sri Lanka Central Bank is waiting for the government proposal on the domestic debt restructuring (DDR), the central bank governor Nandalal Weerasinghe said amid uncertainty over DDR and speculations over instability in the banking sector.

“On debt restructuring, the borrower is the ministry of finance’s treasury. Certainly we will announce what the strategy will be. We are waiting for a government proposal,” Weerasinghe said.

Sri Lanka’s investors are waiting on assurances to be made on debt restructuring and optimization, Central Bank Governor Nandalal Weerasinghe said, “It is up to the government to clear the uncertainty, because from our side we have done that part.”

The central bank cut the key policy rates by 250 basis points to spur a faltering economic growth as inflation was decelerating faster than it projected.

The speculation of DDR has hit the market and the risk premium has kept the market lending rates well above the central bank’s policy rates. The government has yet to present its plans on DDR.

Weerasinghe said the central bank has done its best to reduce the risk premium through bringing down the market lending rates while keeping the policy rates unchanged.

Sri Lanka’s President Ranil Wickremesinghe has discussed progress of International Monetary Fund program and debt restructuring during a visit of Deputy Managing Director Kenji Okamura, statement said.

“The discussion primarily focused on the progress of the IMF program between Sri Lanka and the IMF,” a statement from President’s office said.

“Attention was also paid to the on-going debt restructuring negotiations.”

However Officials from IMF have said Sri Lanka has to focus on expanding taxes.

“We discussed the importance of fiscal measures, in particular revenue measures, for a return to macroeconomic stability,” Deputy Managing Director Kenji Okamura said in a statement.

The finance ministry this week issued rules requiring everyone above 18 year of age to register to pay income tax.

“I was encouraged by the authorities’ commitment to negotiate a debt strategy in a timely and transparent manner.

The market generated a revenue of 738 million rupees, while the daily average was 1 billion rupees.

Top gainers in trade were Vallibel One, LOLC Finance and Browns Investment. (Colombo/June02/2023)

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