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Friday June 14th, 2024

Sri Lanka girls from ‘unimaginable’ backgrounds driven sex trade by currency crisis: ex-President

ECONOMYNEXT – Sri Lanka’s latest currency collapse is driving girls in to the sex trade in a phenomenon which was difficult to imagine, given their family backgrounds, ex-President Maithripala Sirisena said as inflation topped 70 percent after two years of money printing to keep rates down.

Due to current economic conditions social problems were worsening, he said.

“Girl children (gahanu daruwan) from unimaginable (hithun-ner-wuth beri) families are turning to prostitution in a large scale according to what police officials tell us,” ex-President Sirisena was quoted as saying at his party headquarters by Sri Lanka’s Aruna newspaper.

Sri Lanka’s rupee collapsed from 182 to 360 to the US dollar after two years of money printing to suppress rates to stimulate the economy.

Out-migration as well as prostitution are routine trends seen in countries with Sri Lanka style central banks in Latin America whose currencies collapse steeply analysts have warned when the country started on a devaluationist path (Sri Lanka’s devaluationist REER targeting is a tiger’s tail).

“It is not necessary for central banks to create hyperinflation like in Zimbabwe or Venezuela and force mothers and sisters to sell their bodies to save children and little brothers and sisters from starvation to feel the bad effects of currency depreciation and inflation,” EN’s economic columnist warned at the time explaining how teachers and doctors crossed the border to Columbia to turn to the sex trade when the peso collapsed.

Classical economists and analysts have called for the central bank’s ability to manipulate rates through open market operations to be curbed by law, to prevent currency depreciation and forex shortages and institutionalize monetary stability to harden the exchange rate peg.

Many people are now rushing to get jobs in the Middle East with currency-board-like monetary regimes.

But the country’s bureaucrats and economists, backed by the International Monetary Fund have strongly resisted the idea of rules in favour of money printing through ‘flexible’ and discretionary policies.

Legislators however have the law making power to take away the money printing powers that were given to economists in 1950 through a Latin America style central bank law with unlimited sterilization powers and harden the peg any time they wish.

Sri Lanka’s politicians and economists frequently point to countries without flexible monetary policy or less flexible policies as examples to follow but take no action to follow their monetary policies, choosing flexible intermediate regimes instead.

Many stable pegs – which tend to have low inflation and low interest rates – hiked their policy rates last week despite having having low inflation. Hong Kong, GCC pegs, Vietnam hike rates after Fed as Sri Lanka eyes flexible policy

In Latin America collapses of so-called routinely drive populations to out-migration and prostitution analysts have warned.

In 2022 Sri Lanka is suffering from the worst currency crisis since the soft-peg was created in 1950. The soft-peg has driven the country into the IMF along with ‘stabilization policies’. Sri Lanka is now going to the IMF for the 17th time. (Colombo/Sept30/2022)

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Sri Lanka opposition leader proposes Grama Rajya system in addition to 13A

Opposition leader Sajith Premadasa (r) – File photo

ECONOMYNEXT — Sri Lanka opposition leader Sajith Premadasa has proposed devolving power to the village level through a Grama Rajya system in addition to implementing the 13th amendment to the constitution.

Speaking at an event in Jaffna on on Wednesday June 12, Premadasa said all provinces will benefit from the 13th amendment.

“Whatever one’s ethnicity, religion, status or region, this country has citizens of equal level. They’re all Sri Lankan citizens.

“There is no division or grouping.  As we give you and every other province what you should be given through the 13th amendment, we must implement a Grama Rajya system,” Premadasa said, addressing a crowd of school children and other attendees.

Premadasa’s assurance of implementing the 13th amendment has already drawn some protest in the south.

A collective of civil society organisations held a protest outside the office of the leader of the opposition in Colombo on Thursday June 12.

Calling itself the ‘Coalition Against Partition of Sri Lanka’, the group carrying national flags marched up to the opposition leader’s office Thursday June 13 morning and demonstrated against the full implementation of the 13th amendment.

“We arrived here today to hand over a missive against devolving police powers, land powers and judicial powers. If Mr Premadasa is inside, come outside,” Jamuni Kamantha Thushara, Chairman of the Citizen’s Movement Against Fraud, Corruption, and Waste, was seen declaring at the site.

“First of all, tell us what we stand to achieve by dividing and giving away the north and east,” said another protestor, warning against bringing the 13th amendment “anywhere here (paththa palaathe)”.

A police officer at the scene the protestors that a secretary to the opposition leader was ready to accept their letter.

“In Kilonochchi, he says the 13th amendment will be implemented. The votes in the north are going to be decisive this election. To win those votes, President Ranil Wickremesinghe, Sajith and Anura Kumara Dissanayake all say they will implement the 13th. We will not allow this country to be divided into nine pieces,” said Thushara.

Ven Balangoda Kassapa Thero, who was arrested on June 06 during a protest against the new Electricity Act, was also seen at Thursday’s protest. The Buddhist monk requested for a debate with Premadasa on the matter of the 13th amendment. (Colombo/Jun12/2024)

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Sri Lanka rupee closes flat at 303.85/95 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed broadly flat at 303.85/95 to the US dollar on Thursday, from 303.80/304.00 to the dollar the previous day, dealers said. Bond yields were down.

A bond maturing on 15.12.2026 closed at 10.00/30 percent, down from 10.20/40 percent.

A bond maturing on 15.10.2027 closed at 10.60/75 percent.

A bond maturing on 01.07.2028 closed at 11.00/15 percent, down from 11.15/40 percent.

A bond maturing on 15.09.2029 closed at 11.80/85 percent.

A bond maturing on 15.05.2030 closed at 11.85/12.05 percent, down from 11.90/12.05 percent.

A bond maturing on 01.10.2032 closed stable at 11.95/12.15 percent. (Colombo/Jun13/2024)

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Sri Lanka sells Rs295bn in 2027 to 2031 bonds

ECONOMYNEXT – Sri Lanka has sold 295 billion rupees in 2027, 2029 and 2031 bonds, data from the state debt office showed.

The debt office sold an offered 60 billion rupees of 15 October 2027 at an average yield of 10.30 percent.

All offered 125 billion rupees of 15 September 2029 bonds were sold at 11.00 percent.

All 110 billion rupees offered of 01 December 2031 bonds were sold at 12.00 percent. (Colombo/May13/2024)

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