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Friday June 2nd, 2023

Sri Lanka borders open in peak tourist season amid forex crisis, but caution advised

ECONOMYNEXT – With over 60 percent of the population vaccinated, going for a lockdown and closing down of airports and tourism industry is not planned for the Christmas season, but the public should exercise caution and go about their work, senior health officials said.

With income sources getting blocked for majority in the country, it is not practical to go for a lock down again, therefore there is no decision to go for a lockdown in the coming Christmas season, Secretary to the Ministry of Health, Sanjeewa Munasinghesaid.

“During these lockdowns, many people complained that they do not have a away to live,” Munasinghe said.

“If you heard these people’s complaints, you will never say to lockdown the country again.”

Countries usually lockdown as hospitals gets overwhelmed and deaths go up. However after multiple lockdowns people run out of savings and businesses also get into higher levels of debt.

Blocking flights and closing down the airports also will also not completely stop the variant from coming into the country, Munasinghe said.

After record money printing for ‘stimulus’ Sri Lanka is facing a foreign exchange crisis worse than in 2018 when money was also printed to keep rates down.

Amid a desperate economic situation the country should not block one of its main income sources that can be used to fight the pandemic, Munasinghe said.

For the period of the pandemic since 2020, the government has spent 113 billion rupees totally to bring in medicines, vaccines and develop the infrastructure of the health sector.

“We had to mainly invest in three things. Hospital facilities, medicines and tests kits and vaccines” Munasinghe said.

“Because the vaccine was the priority, the government has spent 66.39 billion rupees totally including the Pfizer booster doses”

“It is noot only tourists that can bring in the variant. Just by blocking them the variant won’t be stopped. And also by doing that we are blocking one of our income source. We need it to get vaccines, provide food and etc.”

Munasinghe said, if the tourism industry operates under a system and tourists are coming in to the country through a specific procedure, then it should be continued.

Sri Lanka imposed a travel ban on November 28 on six African countries where the newest ‘variant of concern’ Omicron emerged.

State Minister of Primary Health Care, Epidemics and COVID Disease Control Sudarshini Fernandopulle informed parliament on Tuesday (30) that health officials are tracing passengers who arrived from high risk countries in the last 14 days before it imposed a travel ban on November 28.

Commenting on the issue Head of department of Immunology and Molecular Medicine at the University of Sri Jayewardenepura Neelika Malavige said, the European countries which identified Covid patients with the Omicron variant, has stated that the variant has been in the Europe since early November.

“There is no guarantee that strict border controls will stop the variant from coming in,” Malavige said.

“Australia and New Zealand had strict border controls since the beginning of the pandemic. But due to the high transmissibility of the delta variant, it got in to those countries. If this omicron has the same or enhanced ability like delta it will be difficult to control it only by strict border controls.”

Though the rate of transmissibility is different, the ways of spreading is identical, Malavige said, therefore at a situation of a world pandemic the general public should cooperate with the health sector to control the spreading by following the basic guidelines.

Sri Lanka at a better place to fight the virus with majority of the population being vaccinated and with booster dose is also continuing.

“We have a completely different situation than last year” Malavige said.

“During that time there was no vaccination and immunity is not strong to withstand the virus, but now we have started even giving the booster dose.

“So even if the Omicron comes, even though we do not have enough data about how it will affect the patients, the immunity of our people will be strong to face it.”

Sri Lanka has so far vaccinated 62.7 percent of the total population.

Deputy Director of Health Services, Hemantha Herath said, the public should follow health guidelines and avoid public gatherings and non essential travel activities in the coming weeks.

“If the things we will lose are greater than the things we gain, then it is not worth it,” he said. “This variant doesn’t come with an announcement. We do not have the ability to tell without conducting a gene sequencing who have the variant”

He said it may be already in the country, therefore following the health guidelines should be the priority of the general public.

ChandimaJeewadara, Director, Molecular and Cell Biology Unit of the University of Sri Jayewardenepura
(USJ) said, Ministry of Health sent a set of samples of the tourists that came to the country during the past weeks.

“MoH has given us samples of the tourists. We expect to give the results of those gene sequencing tests in the coming weekend.” Jeewandara said.

“Last gene sequencing we did show us that 100 percent of the cases we find had the delta variant.”

“No omicron patients have been identified so far in the country” (Colombo/ Dec 03/2021)

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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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