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Tuesday April 16th, 2024

Sri Lanka CEB running low on fuel, power cuts loom amid money printing

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Electricity Board is running low on furnace oil amid dry weather with the state-run Ceylon Petroleum Corporation asking the agency to open its own letter of credit, sector sources said as foreign exchange shortages continue.

The CEB had 5,700 Metric Tonnes of furnace oil and the West Coast Power Company (Yugadanavi) had 15,500 Metric Tonnes.

As of December 20, the CPC had 16,000 metric tonnes of furnace oil and about 500 metric tonnes were produced daily after the refinery was re-started.

With the refinery expected to run up to 25 days, another 12,000 MT would be produced.

This will allow the CEB to produce energy up to mid-January, according to internal calculations.

The CEB had ordered 30,000MT of fuel. As of December 20, the CPC had asked CEB to open a letter of credit and the shipment was not confirmed.

CEB available thermal plants are now fully utilized. If CEB fuel oil plants are halted due to lack of fuel, the utility will have to get power from the West Coast plant violating the merit order.

In that case fuel may be available up to January 24.

Sri Lanka is facing forex shortages due to money printed to maintain low interest rates.

Sri Lanka was earlier printing money to finance the deficit after crippling bond auctions with price controls. Bond markets are now working and money is printed to fill liquidity shortages coming from central bank dollar sales (sterilized interventions).

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IMF urged Sri Lanka to preserve “hard earned gains” after economic crisis: State FinMin

ECONOMYNEXT – The International Monetary Fund has urged Sri Lanka to preserve the hard earned gains after an unprecedented economic crisis under the global lender’s programme, State Finance Minister Shehan Semasinghe said.

The Sri Lankan delegation led by Shehan Semasinghe met Kenji Okamura, the Deputy Managjng Director of the IMF on the first day of the IMF and  World Bank Spring meeting.

“Mr. Okamura commended the Sri Lankan authorities on strong programme implementation and excellent reform progress. He emphasised the need to preserve the hard earned gains Sri Lanka has experienced since the beginning of the IMF programme and continue strong ownership,” the State Minister said in his X (Twitter) platform.

He said the Sri Lankan delegation including Central Bank Governor Nandalal Weerasinghe and Secretary to the Treasury Mahinda Siriwardana explained the recent socio-economic developments to Okamura.

He also affirmed the IMF top official on the authorities’ commitment to ensuring continuity and consistency of macroeconomic policies and reforms undertaken under the programme. (Colombo/April 16/2024)

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Sri Lanka State FinMin meets BCIU in US; discusses post-crisis investment prospects 

ECONOMYNEXT – Sri Lanka’s State Finance Minister Shehan Semasinghe met Business Council for International Understanding( BCIU) in Washington on the sideline of the IMF/World Bank Spring Meetings late on Monday and discussed investment prospects in the island nation which is gradually recovering from an unprecedented economic crisis.
“Our discussion centered on the potential that Sri Lanka offers for international investors. Explored various sectors, including education, tourism, renewable energy, agriculture and technology, where strategic investments can drive sustainable economic growth and development,” Semasinghe said in his X (Twitter) platform. 
“We reviewed the current macro-economic landscape of Sri Lanka, including recent reforms that have transformed to results. Glad to concluded the forum by marking constructive dialogue and a shared commitment to support the economic development of Sri Lanka.” 
“We thank participants, stakeholders holders and global partners for the significant interest shown in unlocking the full potential of the Sri Lankan economy and fostering greater international understanding and cooperation.” (Colombo/April 16/2024) 
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India allows Sri Lanka to import 10,000MT of onions

ECONOMYNEXT – India has relaxed an export ban allowing 10,000 metric tonnes of onions to be shipped to Sri Lanka, the Indian High Commission in Colombo said.

“The exemption for Sri Lanka reiterated India’s Neighbourhood First policy, adding to the Sinhala and Tamil New Year festivities here,” the statement said.

Onion prices went up in Sri Lanka after India and Pakistan banned exports.

The Directorate General of Foreign Trade has issued a notice allowing National Co-operative Exports Limited to ship 10,000 MT of onions.

The UAE has also been allowed to import 10,000MT of onions on top of 24,400MT already permitted.

A large Indian and South Asian expat community lives in the UAE. (Colombo/Apr15/2024)

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