Economy

Sri Lanka dreams of dollarized tourism Macau in Mannar

Wednesday September 14, 2022 10:27 am

ECONOMYNEXT – Sri Lanka can build Mannar island into a entertainment filled tourism hotspot which will use dollars as its currency like Macau, newly appointed state minister for tourism Diana Gamage has said.

Macau adds to a long list of dream countries with stable single anchor monetary regimes with currency boards of currency board like systems.

Other such countries that Sri Lanka frequently aspires to become economic hubs like Singapore (modified currency board), Dubai (currency board like system) or Hong Kong (orthodox currency board).

“We can make the Mannar Island like entertainment location like Macau island,” Minister Gamage told after assuming duties.

“Business can be done in dollars. No rupees.”

Macau has a currency board with Hong Kong dollar at 1.03 Macau Pataca and also currency competition where foreign currencies like the US dollar can be used.

In Sri Lanka the central bank and police arrest people who try to protect their savings from depreciation using draconian legal tender laws after printing money to create forex shortages. In 2022 a money laundering law was also deployed against the people.

Sri Lanka has a Latin America style unstable intermediate regime (a reserve collecting peg with liquidity injections to suppress rates) now called a ‘flexible exchange rate’.

A Chinese backed reclaimed area off the capital Colombo called Port City is already dollarized.

Sri Lanka is now facing the worst currency crises in the history of the central bank after two years of money printing to suppress interest rates.

The dual anchor intermediate regime was set up in 1950 bringing high inflation and depreciation after abolishing a currency board which had kept the economy stable through World Wars and a Great Depression.

Due to the liquidity injection tools of the central bank which trigger forex shortages Sri Lanka frequently runs into forex shortages and currency crises which lower living standards of the people and trigger social unrest.

Sri Lanka tightens legal tender, limits foreign currency possession

Sri Lanka now has difficulty in importing oil and other essentials, though the central bank has allowed rates to go up, reduced money printing and domestic credit allowing the external sector to stabilize.

“When we were small our parents used to scare us saying that you may be taken to Mannar to make dry fish,” Minister Gamage said.

“Is making dry fish the solution to Sri Lanka? Why do we keep Mannar to produce dry fish, when we can earn dollars?

Since the setting up of the Latin America style central bank the rupee had depreciated from 4.70 to the US dollar to 360. Sri Lanka defaulted on dollar loans in April 2022 for the first time. The seeds of the next crisis is being now planted with le (Colombo/Sept14/2022)

Comments (1)

sacre blieu says:

September 15, 2022 at 8:30 am

It will emerge into another rotten mess with sub-social, anti-social and crime. Our country is polluted bad enough and we must first put first things first into a meaningful socio-economic order and be a unique country.

Reply

View all comments (1)

Comments (1)

Cancel reply

sacre blieu says:

September 15, 2022 at 8:30 am

It will emerge into another rotten mess with sub-social, anti-social and crime. Our country is polluted bad enough and we must first put first things first into a meaningful socio-economic order and be a unique country.

Reply

1 UAE investors express interest in Sri Lanka’s energy, tourism, ports, real estate: Ali Sabry

2 CORRECTION - Sri Lanka president extends import levies on selected foods

3 Sri Lanka UGC wants to boost number of IT-related degrees

4 Sri Lanka banks repay debt or collect US$1.7bn to Sept 2023

5 Sri Lanka IMF review goes to executive board on December 12

Markets

Sri Lanka stocks close up as some investor interest returns

Monday December 4, 2023 6:12 pm

ECONOMYNEXT – The Colombo Stock Exchange closed up on Monday, CSE data showed.

The All Share Price Index was up 0.22 percent, or 23.33 points, at 10,743.59.

The S&P SL20 index was up 0.68 percent, or 20.60 points, at 3,067.73.

Turnover was at 708 million. The banks sector contributed 189 million, while the food, beverage and tobacco sector contributed 176 million of this.

Sri Lanka’s stock market has seen some investor interest return after last week’s news that the country had managed an agreement on a debt restructuring deal with an official creditor committee, and foreign funds for some development projects resumed.

Top positive contributors to the ASPI in the day were Sampath Bank Plc (up at 71.50), LOLC Holdings Plc (up at 379.00), and Commercial Bank of Ceylon Plc, (up at 90.90).

There was a net foreign outflow of 52 million.

Citrus Leisure Plc, which announced that its banquet hall and revolving restaurant at the Lotus Tower would launch on or around Dec 9, saw its share price rise to 6.20 rupees. (Colombo/Dec4/2023).

Bonds & Forex

Sri Lanka rupee closes broadly steady at 328.10/30 to the US dollar

Monday December 4, 2023 5:24 pm

ECONOMYNEXT – Sri Lanka’s rupee closed at 328.10/30 to the US dollar on Monday, from 328.00/10 on Friday, dealers said.

Bond yields were stable.

A bond maturing on 01.06.2025 closed at 13.70/14.00 percent from 13.70/95 percent.

A bond maturing on 01.08.2026 closed at 13.90/14.10 percent from 13.90/14.05 percent.

A bond maturing on 15.01.2027 closed at 14.00/14.10 percent from 14.05/10 percent.

A bond maturing on 01.07.2028 closed at 14.20/35 percent from 14.15/25 percent.

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

A bond maturing on 01.07.2032 closed at 14.05/40 percent, from 14.00/45 percent. (Colombo/Dec4/2023)

Crime

Gov minister highlights abortion rights, sex-ed for children, and Sri Lanka men killing their women

Monday December 4, 2023 4:21 pm

ECONOMYNEXT – Sri Lanka’s legislators have politicized the topics of rape and violence without addressing the elephant in the room, Jeevan Thondaman, Minister of Water Supply and Estate Infrastructure Development said in parliament on Monday (4).

“All the members here are talking about rape. What happens after that? We must talk about abortion rights. That is not something anyone wants to touch on, and that is why we are in this place right now,” Thondaman said.

“Despite alarming statistics on rape and violence, women are often blamed and punished for it. The criminalisation of abortion is a major example of this.”

Sri Lanka has some of the most restrictive abortion laws in the world. According to a 2016 estimate by the Health Ministry, he said, approximately 658 abortions take place a day, and close to 250,000 a year.

“That’s 250,000 women whose lives you are endangering.”

He added that what was needed at this point in time was comprehensive sexual education (CSE) for children and young people.

“Only through CSE in schools will children and young people develop, accurate, age appropriate knowledge attitude and skills; positive values such as respect for human rights, gender equality, diversity and attitude and skills that contribute to a safe, healthy and positive relationship.”

Thondaman pointed out that CSE plays a pivotal role in preparing young people for a world where HIV, AIDS, sexually transmitted infections, unintended pregnancies, and sexual and gender based violence still pose a risk to their well-being.

“CSE basically empowers children take control and make informed decisions freely and responsibly.”

Thondaman also highlighted the findings of a 2021 study (Fatalities_20211109_UNFPA) by the UNFPA and the University of Kelaniya that showed that a majority of women killed in Sri Lanka were murdered by those close to them.

“62 percent of homicides of Sri Lankan women are committed by either an intimate partner, ex-partner or family member. 84 percent are killed in their own homes by someone they know.”

Police and the judiciary have failed Sri Lanka’s women, the minister pointed out.

“Only 5 percent of these cases, between 2013-2017, were ever concluded. Men claim they were provoked, or are of unsound mind or have mental illness: These have been successful defenses. And the Police often express sympathy to this narrative as opposed to the victim’s.”

“We have a history of protecting oppressors.”

It takes 7-10 years for a child rape case to conclude, he pointed out.

Establishment of child courts are needed, he said, as well as several legislative amendments. “The government is working on a new law to reform the domestic violence act, reform of marriage and divorce laws to ensure there is an easier path to divorce: no one should be forced to remain in a marriage that is either abusive or not healthy.” (Colombo/Dec4/2023)