Banking

Sri Lanka details price controls on bank deposits up to June 30

Tuesday April 30, 2019 8:57 am

ECONOMYNEXT – Sri Lanka’s central bank has set interest ceilings for bank deposits for the quarter ending June 30, on a base rates for short term deposits at 8.0 percent and longer term rates of 10.54 percent.

Sri Lanka took an unprecedented step of ordering price controls on deposits to lower costs and boost margins of banks, making a regulator-driven oligopsony out of a sector where there used to be strong competition.

No ceilings have been set on lending rates.

The price ceiling for savings and term deposits below three months is 7.50 percent or 50 basis points below the standing deposit facility rate (repo window) of the Central Bank.

The base rate for deposits over 3 months is the simple average of the weighted average yield of 12 month Treasury bills at the last four auctions of the first quarter of 2019.

The base rate for deposits below three months is the 8.00 percent standing deposit facility rate (repo window) of the Central Bank.

Deposits below 12-months are controlled at 10.54 percent.

Deposits between 1 and two years are controlled at 11.54 percent (T-bill plus 100 basis points).

Deposits between 2 and 3 years are controlled at 12.04 percent (T-bill plus 150 basis points).

Deposits between 3 and 5 years are controlled at 12.54 percent (T-bill plus 200 basis points).

Deposits of 5 years or more 13.04 percent (T-bill rate + 250 basis points)

No distinction has been made on the risk rating of individual banks.

The Central Bank said when interim interest is paid, the annual effective rate should be below the price control.

But kids with a deposit of 1 year or more, or senior citizens could be 50 basis points higher than the price control. (Colombo/Apr30/2019-SB).

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Economy

Sri Lanka tax hike: no response from president, professionals to discuss next steps

GMOA Secretary Haritha Alutghe

Friday March 31, 2023 1:01 pm

ECONOMYNEXT – Sri Lanka’s trade unions and professional associations who have been agitating against an International Monetary Fund (IMF) backed progressive tax hike will meet to discuss further union action after a letter to the president went unanswered.

Government Medical Officers’ Association (GMOA) secretary Dr Haritha Aluthge told reporters on Friday March 31 that the unions will meet as the self-styled Professionals’ Trade Union Alliance (PTUA) collective which have so far been organising strikes and demonstrations demanding a revision of the taxes.

The PTUA has been awaiting a promised meeting with President Ranil Wickremesinghe for some days now. Aluthge previously said on Monday that if the meeting did not materialise, the unions would be compelled to go on strike.

The issue has become stagnant due to government inaction, said Aluthge at Friday’s press conference.

“The PTUA informed the president in writing yesterday for the last time to please understand the gravity of this situation and to immediately give us a meeting and present the government’s interim solution, through which the government can take measures to ease the sense of tension among professionals,” he said.

The purpose of the meeting is to discuss an “interim solution” to the professionals’ grievances over the progressive income tax hike until a reported revision that’s due in six months when the country’s recently approved 17th IMF programme comes up for review.

“Sadly, there has still been no response,” the GMOA official said.

All unions and professional associations will meet Friday evening together with a number of other unions to discuss further action, he added.

The privately-owned English-language weekly newspaper The Sunday Times reported on March 26 that the IMF had indicated the possibility of revising some of the taxes imposed as part of the IMF’s staff-level agreement with Sri Lanka when the programme comes up for review in six months.

According to the newspaper, IMF officials had conveyed this to representatives of trade unions during a virtual roundtable held last Friday March 24. The virtual meeting was held on the initiative of the IMF and was attended by trade unions and professional associations representing the PTUA including the GMOA. (Colombo/Mar31/2023)

Energy

Sri Lankan transport associations cut haulage and transportation fees after fuel price cut

Friday March 31, 2023 12:58 pm

ECONOMYNEXT – Sri Lanka Association of Container Transporters and fuel bowser owners has decided to reduce the haulage charges and transportation fee, after the government cut the auto diesel prices by 80 rupees, association officials said.

“Due to the recent reduction in Auto Diesel price from March30, 2023, the committee has decided to reduce haulage charges by 7 percent,” association said.

Sri Lanka Private Petroleum Tanker owners has also decided to reduce the transportation fee of fuel by 8 -10 percent from April onwards.

“We will be meeting with the association members and will be deciding on exactly how much we will be reducing,” the General Secretary of the association Nimal Amarasekera told EconomyNext.

“We hope to reduce it by 8-10 percent and will be applied.”

Meanwhile United Lanka Fuel Transport Bowser Owners Association said, the price reduction will be done, and the specific amount will be calculated using the cost per kilometer for a transporting bowser.

“We have different types of bowsers such as 13,200 litre and 19,800 litre likewise,” Association President K.W. Charles told EconomyNext.

“So the cost per kilometer per bowser is different and after we calculate only we can give a specific percentage.

“It will come to effect from this month and the payments for the next month will be based on the new prices.”

Charles said, this is only based on the price reduction of fuel, however several costs as maintenance and spare part costs should also be considered when deciding the transportation cost, which is also being discussed with the Ceylon Petroleum Corporation.

Sri Lanka slashed fuel prices with effect from Wednesday (29) midnight, Power and Energy Minister Kanchana Wijesekera said, after a protest by trade unions of state-run fuel retailer Ceylon Petroleum Corporation (CPC) resulting in queues at filling stations due to supply disruption.

The price of Petrol 92 Octane will be slashed by 15 percent or 60 rupees to 340, Petrol 95 Octane 95 will be reduced by 26.5 percent or 135 rupees to 375, Auto Diesel by 19.8 percent or 80 rupees to 325, and kerosene by 3.3 percent or 10 rupees to 295. (Colombo/ March31/2023)

Markets

Sri Lanka’s shares edge up in mid day trade

Stock Market. Free public domain CC0 image.

Friday March 31, 2023 11:51 am

ECONOMYNEXT – Sri Lanka’s shares edged up in mid day trade on Friday, Colombo Stock Exchange (CSE) data showed.

All Share Price Index was up 1.09 percent or 100.69 points to 9,329.19, while the most liquid index was up 1.23 percent or 32.86 points to 2,697.12.

The market generated a turnover of 895 million rupees.

Top gainers during mid day trade were Commercial Bank, Hatton National Bank and Expolanka. (Colombo/Mar31/2023)