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Wednesday December 6th, 2023

Sri Lanka food importers seek exemption from open account trade ban

ECONOMYNEXT – Sri Lanka ‘s essential food importers have sought exemption from newly imposed trade restrictions amid fears that banks will not be able to give dollars fast enough to clear perishables, an industry association said.

Sri Lanka banned open account and DA/DP term imports from May 20 in an attempt to reduce Unidyal style gross-settlements being made for what officials called ‘non-essential’ imports.

Officials prefer for imports to be paid through the banking system rather than through unofficial channels. Vehicle spare parts and similar items are believed to be coming from unofficial payments.

A large majority of Sri Lanka’s foods are imported through DA/DP terms due to long relationships with suppliers, who are ready to give credit, despite the currency crisis.

“Some of the goods are perishable,” an industry official said. “If we have to run from bank to bank to find dollars items like potatoes and onions will perish.”

“Usually we clear the good and settle slowly. So we have asked authorities to exempt food from ban.”

Meanwhile food importers have started to get some dollars from an Indian credit line, helping the situation, the person said.

Sri Lanka is estimated to need about 200 to 250 million US dollar a month for food imports according to industry officials.

Sri Lanka is now going through the worst currency crisis triggered by the islands 72 year old central bank which printed money for two years to maintain artificially low interest rates and lost the ability to maintain its soft-dollar peg.

Sri Lanka’s central bank raised policy rates and market interest rates have moved up, which is expected to curb domestic credit and slow investment and consumption.

The gap between officials rates and the unofficial rates had narrowed by the beginning of May but concerns have emerged as money is still being printed to pay state worker salaries. (Colombo/May20/2022)

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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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