An Echelon Media Company
Wednesday September 27th, 2023

Sri Lanka forex reserves drop to US$1.9bn in March 2022

ECONOMYNEXT – Sri Lanka’s foreign reserves dropped 372 million US dollars to 1.9 billion US dollars as money continued to be printed to keep rates down amid a large budget deficit and looming debt repayments.

Sri Lanka is following flexible inflation targeting a non-rule bound non-regime that has triggered repeated currency crises over the last 7-years including during an International Monetary Fund program.

During the last IMF program a ‘monetary policy consultation clause’ was easily circumvented to trigger a currency crisis in 2018.

Sri Lanka has printed large volumes of money from 2020 under Modern Monetary Theory, or post-Keynesian ‘alternative theory’ triggering the worst currency crisis in history and bringing the country to the brink of default.

Foreign reserves at 1.9 billion US dollars are about 1 months of imports. Of this about 1.6 billion US dollars is from a Chinese swap.

A central bank without reserves can float the currency and suspend convertibility.

In March an attempt was made to float but the 372 million US dollar reserve loss shows that a weak side convertibility in a peg was used. There is also a strong side convertibility undertaking in the form of a surrender requirement. (Colombo/Apr07/2022)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka to introduce social security system: minister

ECONOMYNEXT – Sri Lanka’s Labour minister has said that they are set to introduce a comprehensive national social security system, covering all workers.

“The system will address the weaknesses of the current system and provide much-needed support to workers and their families,” Manusha Nanayakkara, Minister of Labour and Foreign Employment said on X (formerly known as Twitter).
He did not specify the details.

Nanayakkara also spoke of the need for robust social security when he met with exporters last week to discuss labor law reforms, boosting female workforce participation and attracting FDI.

Sri Lanka plans to reform labour laws for an export-oriented economy.

The pandemic and the economic crisis highlighted the need to improve the coverage of social security.

Studies have shown that Sri Lanka’s women are kept out of formal employment by childcare, elderly care and housework, as day care and elderly homes are either too expensive or too few.

The government imposed a Social Security Contribution Levy to increase its revenue last year. (Colombo/Sep27/2023)

Related stories
Unpaid care work keeps Sri Lanka’s women out of workplace: Researchers

Sri Lanka’s pandemic-hit unemployment show need for social security: IPS

Continue Reading

Sri Lanka’s stocks up in trading on Wednesday morning

ECONOMYNEXT – Sri Lanka shares were picking up in trading on Wednesday morning.

Turnover was at 50 million. Trading in the Capital Goods Industry Group was driving turnover.

The All Share Price Index was up 0.37 percent or 41.78 points to 11,289.94, while the S&P SL20 was also up 0.68 percent or 21.66 points to 3,187.65.

Hatton National Bank, Commercial Bank and LOLC saw gains in morning trade, while Tokyo cement and Lanka Hospitals were trading down during morning trading. (Colombo/Sep27/2023)

Continue Reading

Sri Lanka rupee opens at 323.50/324.10 to the US dollar, bond yields stable

ECONOMYNEXT – Sri Lanka’s rupee opened at 323.50/324.10 to the US dollar on Wednesday, after closing on Tuesday at 323.70/324.20 to the US dollar, dealers said.

A bond maturing on 01.08.2026 was quoted at 15.50/70 percent on Wednesday up from Tuesday’s close at 15.45/65 percent.

A bond maturing on 01.05.2028 was quoted at 14.50/55 percent from closing at Tuesday at 14.30/55 percent. (Colombo/Sep27/2023)

Continue Reading