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Thursday December 1st, 2022

Sri Lanka economy re-opens after controlling Coronavirus, Covid-19 curfews lifted

ECONOMYNEXT – Sri Lanka ended nightly curfews on June 28, the Presidents office said as most economic activities are resuming subject to contact tracing and new cases are limited to quarantined sailors and foreign returnees.

“The curfew has completely been lifted effective from today, June 28th Sunday,” the President’s office said in a statement.

Sri Lanka is opening museums from July 01. However, people have been advised not to hold large cultural and religious events.

Under Control

“The Covid-19 epidemic is now under control,” the head of Sri Lanka’s health service Anil Jasinghe said last week giving the go head to open cinema halls subject to health guidelines.

Most of Sri Lanka’s businesses are open and schools are also set to open in July in a phased program.

Sri Lanka has been quarantining or isolating foreign arrivals from China since January 2020 and started to aggressively contact trace arrivals from third countries from March. On March 19 the airport was closed for inward passengers and strict curfews imposed.

Some observers say Sri Lanka’s Coronavirus activities were perhaps only second to Vietnam.

But Vietnam used testing aggressively at a time when Sri Lanka limited PCR tests to a hospital setting and waited for symptomatic cases to turn up with no community testing of high-risk groups and private hospitals raided by a drug price control authority stop voluntary testing.

Under the strategy a stricter lockdown that Vietnam was required.


Sri Lanka, Vietnam in Coronavirus battle of wits to bust the Covid-19 bug

How Sri Lanka and Vietnam are smashing Coronavirus, and what will happen next

Sri Lanka also did not rest frontline workers, leading to sailors in a navy camp which was involved in contact tracing being infected.

The last case from the community in Sri Lanka was found on April 30, 2020, health authorities say.

Sri Lanka had confirmed 2033 Coronavirus cases up to June 27, with 9 new cases on the day. Six were from Navy camp that was injected and 03 were from foreign returnees, the health ministry said.

The Navy camp which was infected in late April has been generating new cases in part due to weaknesses in the testing regime, observers have said, though all contacts are isolated.


Sri Lanka should allow active, targeted, voluntary Coronavirus tests on high risk groups as curfews lift: Advocata

Authorities are now testing in high-risk areas in the community unlike earlier.

Foreign Travel

Sri Lanka has been bringing back stranded citizens from abroad and are quarantining them, which is the second source of new cases.

Paid quarantine at hotels is available for those who do not want to go to free military-run quarantine centers.

On June 15, 2020, onwards all the zoological gardens were opened for visitors.

Visas of foreigners in the country were automatically extended.


Sri Lanka extends visas of foreigners in the country till July 11

Sri Lanka also said it was planning to allow tourists in from August 01, subject to multiple PCR tests but no mandatory quarantine but late said the opening may be delayed.

Sri Lanka has also suspended crew change program via the country’s ports and airports after a number of Indian seamen tested positive and had to be admitted to the hospital.


Sri Lanka suspends ship crew changes as new arrivals drive Coronavirus total over 2000

Sri Lanka ship crew change service gathers pace

Under the plan announced so far, tourists could enter from Katunayake, Ratmalana, or Mattala airports from August 01. Tourists will be asked to take a pre-departure test at least 72 hours before departure.

They will be tested on arrival.

Tourism Authority said all travelers will require a valid visa; this will be issued for 30 days and extendable for up to 6 months after arrival for 100 dollars. Online visa at

Further relaxation for long stay guests is under consideration, enabling tourists to be granted five-year multiple-entry visas with a maximum 6 months stay.


Sri Lanka plans to allow tourists from August, no mandatory quarantine

Sri Lanka Tourist Development Authority had announced a relief scheme for the sector.

About 124,000 staff with employment records in hotels and travel agencies as well as over 10,000 workers at restaurants, spas, tourist shops and water sports centres could benefit, the SLTDA said.

Sri Lanka hotels, travel agencies to get 4-pct loan on EPF records: Tourism Authority.

State-run SriLankan Airlines is operating cargo flights to over 20 destinations and is ferrying in stranded Sri Lankans for quarantine.

The airline is also re-structuring debt and has said it is ready to bring in tourists as soon as the go ahead is given.


SriLankan Airlines to restructure US$680mn in debt, slashing costs to survive after Covid-19

Sri Lanka airline eyeing flights to Korea, China, Australia, Maldives from August

Schools and Places of worship

Places of religions worship and tuition classes have been allowed to open under health guidelines and social distancing.


Sri Lanka allows limited worship, tuition classes as new Covid-19 cases go down

Education Ministry said schools are expected to open on June 29, 2020 under four stages.

Under the first stage Principal, academic and non-academic staff as well as the school management bard will be reporting to school in order to prepare class rooms and school premises.

Under the second stage grade 5, 11 and 13 students will attend the school from July 6 – July 17.

From July 17 -24 grade 10 and 12 students will be attending the school and from July 24 students from 3,4,6,7,8 and 9 will be attending the school.


Though Sri Lanka has made strong gains in Coronavirus and is perhaps only behind Vietnam, the country has been hit by monetary instability due to long standing problem with a discretionary policy as well as a fiscal ‘stimulus’ in 2020 which hit tax revenues and earned a credit downgraded.

On top of earlier money printing Sri Lanka is also giving central bank credit (printed money) re-financed credit to affected businesses worsening fears about the currency and foreign debt repayments.

Fitch Ratings and Standard and Poor’s had already downgraded the country after taxes were cut in early 2020 in a fiscal stimulus which was followed by rate cuts and liquidity injections leading to foreign currency shortages and fears about the ability to repay debt.


Sri Lanka prints more money as rating downgraded to just above CCC

Sri Lanka policy incoherence hurting rating, potential lenders: Fitch

Sri Lanka central bank injects Rs459bn from Feb, spent forex reserves US$1.3bn

Sri Lanka’s (lka) rating scale used to assess the relative creditworthiness of domestic issuers after the sovereign rating was downgraded will also be changed or r-ecaliberated, after the sovereign rating was downgraded

Bad loans in Sri Lanka’s banks will worsen after a Coronavirus pandemic, pressure on foreign loan funding could intensify and Interest margins would be squeezed amid weak loan growth, Fitch, a rating agency has said.

Bad loans had risen to 5.1 percent of gross loans by the first quarter of 2020, from 3.4 percent a year earlier, and Fitch expected bad loans at banks rated by the agency to peak at 13.2 percent in 2021, when loan classification rules come back to normal.

Sri Lanka’s budget deficit is expected to rise to at least 8.5 percent in 2020 from 6.8 percent last year.

Sri Lanka is planning a budget deficit of 8.5 percent of the gross domestic product in 2020 up from 6.8 percent a year earlier and a revenue loss 440 billion rupees following tax cuts, while capital expenses will be slashed, finance ministry data shows.

Sri Lanka is expecting tax revenues to fall 429 billion rupees to 1305 billion rupees and non-tax revenues by 11 billion rupees to 145 billion rupees, taking total revenues down 440 billion rupees to 1,450 billion rupees according to a draft budget published by the finance ministry.


Sri Lanka eyes 8.5-pct of GDP deficit in 2020, Rs440bn revenue loss after stimulus

Sri Lanka bank forex funding pressures, bad loans to rise after Covid-19: Fitch

Sri Lanka has opened negotiations on a new program with the International Monetary Fund on April 16 but no agreement has been announced so far.

Sri Lanka’s existing program with the IMF is stalled after the new administration slashed taxes in January going against its ‘revenue-based fiscal consolidation’ thrust, worsening the deficit.

The Coronavirus crisis hit in March, which has further hit revenues as economic activities came to a virtual standstill amid lockdown-style curfews to curb the spread of the virus.


Sri Lanka in talks with IMF for rapid finance amid Coronavirus crisis

Sri Lanka 2020 GDP to contract 0.5-pct IMF says amid Coronavirus hit

Election Commissioner announced the General Elections which will elect a new parliament are due on August 05, 2020.


Sri Lanka Parliamentary General Election to be held on Aug 5

President Gotabaya Rajapaksa’s Sri Lanka Podujana Party which won an election with a landslide victory on February 10, 2018 will be led by his brother Mahinda Rajapaksa.

The losing Presidential candidate Sajith Premadasa will lead the Samagi Jana Balawegaya coalition.

The main constituent party of the grouping that fought the general elections, the United National Party of ex-Prime Minister Ranil Wickremesinghe has split and is going alone. (Colombo/June19/2020-sb)

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Sri Lanka’s inflation eases to 61-pct in November

ECONOMYNEXT – Sri Lanka’s 12-month inflation in the capital Colombo fell to 61 percent in November 2022 from 66 percent in October as price stabilized after interest rates were allowed to go up and the exchange rate was pegged around 360 to the US dollar.

The widely watched Colombo Consumer Price Index fell absolutely 0.5 percent to 242.6 points in November after falling .04 percent in the October.

Food prices fell 1.5 percent after falling 2.0 percent a month earlier. The sub-index containing gas fell 0.5r percent and transport fell 3.6 percent.

But some services continued to go up, as relative prices adjusted to the steep fall in the currency after two years of money printing to suppress rates.

Health costs went up 5.7 percent. Furnishing and routine maintenance rose 0.4 percent.

Sri Lanka’s central bank hiked policy rates to 15.5 percent in April and pulled back on longer term money printing, allowing market rates to go to around 30 percent.

The exchange rater is pegged around 363 rupees with a surrender rule where banks are forced to sell dollars to the central bank for new liquidity.

The ongoing currency and inflation crisis is the worst in the history of the central bank.

Sri Lanka’s Latin America style central bank was set up in 1950 giving powers to the country’s macro-economists the power to mis-target rates, create currency crisis and high inflation. (Colombo/Nov30/2022)

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Sri Lanka shares close at one-month high

ECONOMYNEXT – Sri Lanka shares closed at one month high on Wednesday gaining for the fourth session on news that government is in talks with ADB and World Bank to get a 1.9 billion dollar loan facility, brokers said.

The main All Share Price Index (ASPI) closed 3.3 percent or 276.02 points higher at 8,651.23, highest index gain in since November 01.

“Investor participation improved on the back of confirmed talks with multilateral and bilateral lenders including world banks and ADB for USD 1.9Bn after IMF board level agreement is reached,” First Capital Market Research said in it’s daily note.

Former Central Bank Governor Indrajit Coomaraswamy said in a forum on Monday that the government is in discussion with ADB and World Bank to get loans of 1.9 billion US dollars after a reform program with International Monetary Fund is approved

A policy loan now being discussed with the World Bank may bring around 700 million US dollars, Coomaraswamy told a business forum organized by CT CLSA Securities, a Colombo-based brokerage.

The Asian Development Bank may also give around 1.2 billion US dollars most of which will be budget support, he said.

The market witnessed a turnover of 3.3 billion rupees, higher than this year’s daily average turnover of 2.9 billion rupees. This is the highest turnover generated since October 04.

In the last few sessions market gained after Central bank governor said market rates should eventually ease despite the fears of a domestic debt restructuring as inflation falls, increased liquidity in dollar markets, and the inter-bank liquidity improves.

In the past sessions, the index continued to fall on the speculation of a local debt restructuring although no proper decision has been taken so far.

The market saw a foreign inflow of 39 million rupees. The total net foreign inflow stood at 18.33 billion rupees so far for this year.

The more liquid index S&P SL20 closed 3.4 percent or 89.78 points higher at 2,730.08.

The ASPI has fallen 0.5 percent in November after losing 13.4 percent in October.

It has lost 29.2 percent year-to-date after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.

Sampath Bank pushed the index up to close at 10.9 percent to 36.6 rupees.

Other top gainers were Browns Investment gained 15.4 percent to close at 7.5 rupees and LOLC gained 9.4 percent to close at 411.3 rupees.(Colombo/Nov30/2022)

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Sri Lanka bonds, T-bills ease, overall market dull

ECONOMYNEXT – Sri Lanka’s treasury bonds eased and T-bill yields fell on the speculation on talks with ADB and World Bank to obtain financial aid but the over all market was dull on Wednesday while the Central Bank’s guidance peg remained unchanged, dealers said.

“During the day, secondary market witnessed some buying interest on the back of speculations on yields easing while talks about financial aid from ADB and World Bank further strengthened interest,” First Capital Market Research said in it’s daily note.

A bond maturing on 01.05.2024 closed at 32.00/60 percent on Wednesday, down from 32.30/90 percent on Tuesday.

A bond maturing on 07.07.2025 bond closed at 30.80/31.30 percent up from 30.30/31.25 percent on Tuesday.

A bond maturing on 15.05.2026 closed at 31.00/30 percent down from 31.10/31.30 percent on Tuesday.

The three-month T-bills closed at 32.30/33.25 percent, down from 32.60/33.00 percent.

The Central Bank’s guidance peg for interbank transactions remained unchanged at 363.19 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers between 371.79 and 372.10 for small transactions, data showed.

Buying rates are between 361.79 – 362.00 rupees. (Colombo/Nov 30/2022)

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