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Wednesday December 6th, 2023

Sri Lanka central bank profits plunge in 2019 amid monetary stability

ECONOMYNEXT – Profits at Sri Lanka’s central bank plunged 60 percent to 55 billion rupees in 2019 from 137 billion rupees in 2018 as the currency stabilized and profits from inflationary financing of the banking system and budget reduced, official data showed.

The central bank earned 32 billion rupees from forex reserves up from 25 billion rupees in 2018, as more reserves were collected by selling down Treasury bills as domestic private credit slowed.

Another 42 billion rupees in unrealized gains were made from gold (27 billion rupees) and currency swaps (14 billion rupees).

The central bank had ‘borrowed’ dollars from domestic banks through swaps which goes against it when money is printed and the rupee falls. In 2018 when the rupee fell the central bank lost 14.8 billion rupees on the swaps.

The rupee appreciated from around 182.7 at the end of December to around 181.6 by end December 2019.

In 2018 as the currency collapsed the central bank made 146 billion rupees in forex gains as people lost purchasing power, companies with dollar borrowings suffered losses and the national debt exploded.

In 2019 there was a 14.5 billion forex loss as the rupee appreciated amid monetary stability.

Income from local currency assets grew to 13.9 billion rupees in 2019 from 6.1 billion in 2018 even as Treasury bills were sold down.

The Treasury bill stock rose sharply after the liquidity injections made in the last quarter of 2018 when the rupee fell fastest.

Under a reversal of prudential rules set by then Governor A S Jayewardene, a classical economist, the central bank also started buying bonds into its balance sheet to manipulate interests rates further down the yield curve.

In the past rate longer term financial repression had to be done through the so-called captive sources.

The central bank also paid 5.4 billion rupees to employees. Another 1.1 billion rupees was transferred to one pension funds, and yet another 1.1 billion rupees was transferred to a second pension fund.

Under Sri Lanka’s monetary law drawn up by John Exter unrealized gains and forex profits from currency collapses cannot be transferred to the Treasury.

The central bank had made 25.3 billion rupees in profits which could be transferred. Out of those 24 billion rupees was transferred in February 2020.

The profits transferred as excess liquidity had been made the first of the 2020 helicopter drops that led to currency pressure in 2020, trade controls and the credit downgrade amid a Coronavirus crisis. (Colombo/May22/2020)

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  1. I diposited 40 lac in the finance company moratuwa
    Now i want get back my money soon please help me

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  1. I diposited 40 lac in the finance company moratuwa
    Now i want get back my money soon please help me

Sri Lanka rupee closes stronger at 327.40/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 327.40/90 to the US dollar on Tuesday, from 328.10/30 the previous day, dealers said.

Bond yields were stable.

A bond maturing on 01.06.2025 closed at 13.60/70 percent from 13.70/14.00 percent.

A bond maturing on 01.08.2026 closed at 13.90/14.00 percent from 13.90/14.10 percent.

A bond maturing on 15.01.2027 closed at 14.00/15 percent from 14.00/14.10 percent.

A bond maturing on 01.07.2028 closed at 14.10/20 percent from 14.20/35 percent.

A bond maturing on 15.05.2030 closed at 14.20/35 percent, from 14.25/45 percent.

A bond maturing on 01.07.2032 closed at 14.10/35 percent, from 14.05/40 percent. (Colombo/Dec5/2023)

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Sri Lanka stocks close down as investor sentiment dips

ECONOMYNEXT – The Colombo Stock Exchange closed down on Tuesday, CSE data showed.

The All Share Price Index was down 0.40 percent, or 43.50 points, at 10,700.09.

The S&P SL20 index was up 0.43 percent, or 13.32 points, at 3,054.41.

Turnover was at 711 million. The capital goods sector contributed 172 million, the food, beverage and tobacco sector contributed 140 million, and banks 113 million of this.

Top positive contributors to the ASPI in the day were John Keells Holdings Plc (up at 193.00), Richard Pieris And Company Plc (up at 19.80), and Nation Lanka Finance Plc, (up at 0.40).

Negative contributors were Commercial Bank of Ceylon Plc (down at 89.70), Sampath Bank Plc (down at 71.00), and Central Finance Company Plc, (down at 106.00). (Colombo/Dec5/2023).

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Sri Lanka plans to reduce number of school grades from 13 to 12

ECONOMYNEXT – The Ministry of Education proposes to reduce the number of school grades from 13 to 12, according to a government information department statement.

“Every child will be given the opportunity to finish school in 17 years through the proposed new education reforms,” education officials were quoted as saying after a discussion on budget allocations.

Under the proposed system, pre-school education will be at the age of 4 years, the primary section between grades 1-5, junior section between grades 6-8, and senior section between grades 9-12.

The General Certificate of Education Ordinary Level Exam (GCE O/L) is proposed to be conducted in grade 10, and the Advanced Level Examination in grade 12.

It has also been decided to reduce the number of mandatory subjects at the GCE O/L Exam from 9 to 7.

Three new subjects, information and communication technology (ICT), technical and professional skills, and religion and values will be made mandatory and included in those 7 subjects. (Colombo/Dec5/2023)

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