An Echelon Media Company
Saturday April 20th, 2024

Sri Lanka in lockdown-style Coronavirus curfew as count moves up, markets wobble

DESERTED: Colombo’s usually crowded Galle Face beach front is deserted as Sri Lanka is on non-essential Coronavirus holiday.

ECONOMYNEXT – Sri Lanka Friday announced lockdown-style curfews to cover the entire country, while island’s Coronavirus count went to 66, stocks plunged and the central bank slammed import controls as a rupee soft-peg was pressured amid liquidity injections and global volatility.

“Everyone should remain in their homes during this period,” Acting Police Chief C D Wickremeratne said in a notice.

Action will be taken under the quarantine ordinance against any curfew breakers, he warned. The quarantine ordinance was originally promulgated by British rulers.

The curfew will remain in place until Monday, March 23.

For areas which had curfew yesterday the curfew started at 1200 noon and curfew will start in other areas at 1800hours.

Essential service and media could travel showing their identity cards, the statement said.

“This is not the usual type of curfews we have where you are asked not to travel on the road but can go the next house,” Deputy Inspector General Ajith Rohana said in a television interview on Thursday.

“You cannot even go to your neighbor’s house. I have heard some people have having parties during curfew.”

Police had said action will be taken against any gatherings.

Sri Lanka’s Health Ministry data showed that confirmed Coronavirus cases had gone up to 66 while another 213 persons were under observation.

Many of the confirmed were from quarantine, but Sri Lanka has been rounding up a few returnees who were on the loose.

Health Minister Pavithra Wanniarachchi said on March 19, that the government was careful about going in for full lockdowns seen in some other countries. She said Sri Lanka had started several control measures earlier than some other countries.

Sri Lanka has blocked arrivals except for returning Buddhist pilgrims, but allowed those leaving the country to go, instead of fully closing the airport.

Transit passengers are also allowed. As a result, planes still come, cargo can still move in an out, and any remaining foreigners can also move out.

Health minister says Sri Lankans not taking COVID-19 seriously enough

The three day curfew came as Minister Wanniaarchchi warned that some Sri Lankans were not taking the request to stay at home seriously.

Markets Wobble

Sri Lanka’s stocks plunged over 11 percent measured by the Standard and Poor’s SL 20 Index, in the biggest intra-day fall seen for the index before recovering, while the benchmark All Share Index fell over 5-percent as the government slapped full days curfews over the weekend.

The Colombo Stock exchange said trading will halt at 1200 noon to allow staff to get home.

Stocks had steadied to be down 10.7 percent by the S and P SL20 Index, in the second hour of trading, after a 30 minute trading halt, data from the Colombo Stock Exchange showed.

Sri Lanka’s sovereign bond yields have risen sharply over the two weeks, amid global volatility with nervous foreign investors selling out.

Rating agencies were spooked by a so-called stimulus in which value added taxes were slashed.

The yield on Sri Lanka’s 10 year sovereign bond maturing on 03/28/2030, had risen to around 16.7 percent from around 7.8 percent in the first week of March and was quoted around 57 cents to the dollar based on Bloomberg data dealers said.


Sri Lanka stocks down 11-pct amid Coronavirus fears, trading to stop at 1200noon

Sri Lanka sovereign bond yields rise

Information Minister Bandula Gunewardene said the government was planning to build a 200 billion rupee fund by keeping retail fuel at current levels and taxing distributors in a move that is considered prudent.

However the central bank has cut rates and made ‘helicopter drop’ style liquidity injections despite operating a soft-pegged exchange rate.

Any pegged regime that maintains monetary stability and refrains from liquidity injections can benefit from the moves of the anchor currency analysts say.

Import Curbs

The rupee fell to below 188 to the US dollar in the spot market.

Sri Lanka’s central bank halted the imports of cars, perfumes, tyres, footwear, air conditionors, refrigerators, mobile phones, televisions and washing machines, in what the central bank said was “urgent measures to ease the Pressure on the Exchange Rate and Prevent Financial Market Panic due to the COVID-19 Pandemic.”


Sri Lanka halts imports of cars, electronics, perfumes, after soft-peg pressure

Banks have been asked by the central bank not to help customers to import any of the controlled items, which the central bank called ‘non-essential’ either through letters of credit (LCs), documents against acceptance or payment (DA/DP).

Sri Lanka has repeatedly slapped import curbs after following liquidity policies incompatible with maintain the exchange rate. In recent years, risks to the exchange rate hard worsened with call money rate targeting, analysts had said.

“Even the US has this problem,” Information Minister Bandula Gunewardne said. While US markets have plunged, the dollar – free floating exchange rate – has appreciated against key currencies.

Sri Lanka has also delayed elections scheduled for April 25 with the head of the elections commission saying the agency was crippled due to sporadic holiday and curbs on movement. (Colombo/Mar20/2020)

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 discussing giving extra land, water for Chinese oil refinery

ECONOMYNEXT – Sri Lanka is in discussions with China’s Sinopec to give extra land and assure water supplies after the company decided to expand the capacity of a planned oil refinery in Hambantota, Energy Minister Kanchana Wijesekera said.

“There are concerns on how the water supply is going to be provided for the refinery,” Minister Wijesekera told reporters Friday.

The refinery will need more land and also revise conditions in a Board of Investment agreement, he said.

Read more
Sinopec to double capacity of new refinery in Sri Lanka’s Hambantota

Recommendations and decisions from Sri Lanka’s side had already been sent and Sinopec is expected to revert back in May.

“We are hoping to sign the agreement once everyone has agreed,” Wijesekara said.

The principle agreements are expected to be signed by June, he said.

The refinery could sell up to 10 percent of its output in the domestic market.

“There is no commitment by the government to purchase anything,” Minister Wijesekera said. (Colombo/Apr19/2024)

Continue Reading

Sri Lanka rupee closes weaker at 302.00/50 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 302.00/50 to the US dollar in the spot forex market on Friday, down from 301.50/302.00 a day earlier, dealers said.

There was increased demand for dollars after the central bank bought 715 million dollars from forex markets. In the previous two months it was buying on average about 200 million US dollars, leaving market participants and bank in a ‘oversold’ position.

There were some official dollars sales Friday dealers said.

READ Sri Lanka rupee quoted wide to US dollar as peg inconsistencies flare up

Bond yields were broadly steady.

A bond maturing on 15.12.2026 closed at 11.30/40 percent down from 11.35/40 percent.

A bond maturing on 15.09.2027 closed at 11.95/12.05 percent up from 11.90/12.05 percent.

A bond maturing on 15.12.2028 closed stable at 12.15/25 percent.

A bond maturing on 15.09.2029 closed stable at 12.30/40 percent.

A bond maturing on 01.10.2032 closed stable at 12.40/50 percent. (Colombo/Apr19/2024)

Continue Reading

Sri Lanka stocks close down, banks trade down

ECONOMYNEXT – The Colombo Stock Exchange closed down on Friday, data on its site showed.

The broader All Share Index closed down 0.38 percent, or 44.80 points, at 11,753; while the S&P SL20 Index closed down 0.53 percent, or 18.46 points, at 3,456.

Turnover was at 1.4 billion. The diversified financials (Rs366mn) and banks (Rs266mn) sectors continued to see selling pressure.

“This was possibly due to uncertainty around the bond discussions,” market participants said.

With the exception of Sampath Bank Plc (up at 77.50) all other banks traded down in the day. Commercial Bank of Ceylon Plc was down at 104.50, Hatton National Bank Plc was down at 188.50, and DFCC Bank Plc was down at 77.00.

LOLC Finance Plc saw the most trades and closed up at 6.40. Another LOLC company, Browns Investments Plc, also saw high traded volumes and closed up at 5.60.

Softlogic Capital Plc was up at 7.00, and Softlogic Holdings Plc was up at 11.20. A trading suspension imposed on SHL.N0000 was lifted effective today as the company submitted the annual report for the year ended 31st March 2023.

However, shares of the Company will remain in the Watch List “due to Qualified Audit Opinion and Emphasis of matter on going concern in the Independent Auditor’s Report in the Audited Financial Statements for the year ended 31st March 2022.”

Dialog Axiata Plc, which announced its merger with Bharti Airtel Thursday, saw its share price close up at 11.90.

“There was some traction on index heavyweights,” market participants pointed out.

Top contributors to the APSI included Aitken Spence Plc (up at 134.50), Ceylon Tobacco Company Plc (up at 1,245.25, and Lion Brewery (Ceylon) Plc (up at 1,048.50).

There was a net foreign inflow of 5 million. (Colombo/Apr19/2024)

Continue Reading