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Tuesday September 26th, 2023

Sri Lanka foreign reserves drop to US$1.8bn in April

ECONOMYNEXT – Sri Lanka’s gross official reserves have dropped 90 million US dollars to 1,827 million US dollars in April 2022, official data showed, with an attempt to shift from a soft-pegged exchange rate to a float still not having succeeded.

Finance Minister Ali Sabry told parliament that useful reserves were down to 50 million US dollars.

Most of the remaining reserves are from an 11 billion Chinese Yuan swap (about 1.5 billion US dollars) obtained through a swap which has restricted use.

The central bank said there were 1,827 million dollars of currency reserves, down from 1,917 million dollars.

There was 115 million dollars in IMFs special drawing rights, 29 million US dollars in gold, unchanged.

Sri Lanka started to experience unusual monetary instability after the end of a 30 year war with discretionary policy involving flexible inflation targeting (printing money to push inflation up when the credit system recovers from the last currency crisis of the soft-peg).

There can be no currency crises without a peg.

It was coupled with output gap targeting (printing money to push growth after the credit system recovers from the last collapsed of the soft-peg).

To calculate the output gap and give clues to trigger happy interventionists to print money the International Monetary Fund gave technical assistance to calculate an output gap.

In 2018 the central bank printed money and created a currency crisis despite tax hikes and a fuel price formula and triggered a currency crisis showing that under flexible inflation targeting/output gap targeting no amount of fiscal fixes will bring results.

Foreign borrowings ratcheted up at both central government and also Ceylon Petroleum Corporation as output gap targeting created forex shortages, making it difficult to pay for oil or repay debt through the purchase of dollars.

In 2020 taxes were also cut saying there was ‘persistent output gap’ and the central bank also borrowed abroad as money printing led to forex reserve losses and the CPC and the Central government could not borrow. (Colombo/May08/2022)

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Sri Lanka cabinet okays appropriation bill for 2024 budget

ECONOMYNEXT – Sri Lanka’s cabinet of ministers had approved a draft Appropriation Act for 2024, the state information office said.

The Finance Minister’s proposal to gazette the bill and table it in parliament was approved by the cabinet.

Presenting the appropriation bill is the first stage of presenting a budget for 2024,

The appropriation bills set outs the expenditure plans for each ministry.

The budget proposals, made in November is called the second reading of the Appropriation Act. (Colombo/Sept24/2023)

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Sri Lanka’s MEPA to get 28.5 mn rupees from Singaporean AEPW, for beach clean up

ECONOMYNEXT – Sri Lanka’s Marine Environment Protection Authority (MEPA) is to receive 5.7 million rupees a year, for five years, from Singapore-based marine waste solutions provider, Alliance to End Plastic Waste (AEPW), to maintain 8 beach cleaner machines.

The donation is meant to support MEPA clean coastal areas across Sri Lanka, using BeachTech Hydro Sweepy beach cleaner machines, previously donated by the organisation.

The oil industry-founded non-governmental organisation donated the 8 beach cleaners worth about US$180,000 to MEPA in the wake of the 2021 MV X-press Pearl ship disaster.

The machines manufactured by Kässbohrer Geländefahrzeug AG, a German company, are effective at cleaning up plastic nurdles and other types of potentially harmful non-biodegradable waste, minimising human contact with hazardous materials.

As a significant amount of money is spent for the deployment of these machines for beach cleaning activities, the Alliance to End Plastic Waste has agreed to provide the funds for the upkeep of the machines for a period of five years.

With this financial donation, the Maritime Environment Protection Authority will be able to continue using these machines without interruption to clean identified beaches in the future. (Colombo/Sep26/2023)

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Sri Lanka’s SEC makes four new appointments

ECONOMYNEXT – The Securities and Exchange Commission of Sri Lanka (SEC) made four new additions from diverse backgrounds to its leadership.

These appointments are expected to increase the effectiveness of the SEC secretariat in the respective operating areas, the SEC said.

Manuri Weerasinghe, with over 20 years of experience in accounting, financial management, financial reporting and auditing, was appointed Director, Corporate Affairs.

She is a Fellow Member of CA Sri Lanka, member of the Chartered Institute of Management Accountants and a member of the Certified Practicing Accountants of Australia.

Her academic credentials include a Master of Business Administration and a BSc (Hons) in Accountancy and Financial Management (Special).

Prior to joining the SEC, she served in several financial management positions in Bermuda and Sweden.

Madura P R Wanigasekara was appointed Chief Digital Officer. He has over 20 years delivering and managing IT solutions, and has held several senior management positions in the public and private sectors.

His academic qualifications include a Master of Science in Information Technology from the University of Colombo and a Bachelor of Information Technology from the Curtin University of Technology.

He is also a member of the Australian Computer Society (ACS).

Sharmila Panditaratne was appointed Assistant Director, Legal and Enforcement.

She is an Attorney-at-Law with over 21 years of experience as a securities market regulator.

She holds a Master of Laws degree from the University of Houston, Texas and has worked at two law firms in the USA prior to joining the SEC.

Riyaz Bary, Deputy Solicitor General at the Attorney General’s Department was appointed a Director on secondment basis. (Colombo/Sep26/2023)

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