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Friday August 19th, 2022

Sri Lanka inflation rises to 6.0-pct in August 2021

ECONOMYNEXT – Sri Lanka’s inflation in the capital Colombo had risen to 6.0 percent in August 2021, from 5.7 percent in July with prices rising 0.3 percent in the month, data from the state statistics office shows.

The widely watched Colombo Consumer Price Index rose to 143.5 points in August from 143.1 in July with food prices rising 0.7 percent.

The food sub-index had risen 11.5 percent during the past 12-months.

Sri Lanka’s central bank has been printing large volumes of money over the past 18 months, losing forex reserves and weakening the currency.

The rupee has fallen to around 220 to the US dollar for importers and exporters.

When the currency falls due to money printing, the prices of exported products like tea and also imported products like milk go up.

Sri Lanka is showing lower levels of inflation than in the 1980s by lowering the food component in the index and increasing non-traded items like telecoms, which tend to delay the response of the index to monetary instability.

Meanwhile global commodity prices are also rising due to Federal Reserve money printing or the so-called Powell bubble. (Colombo/Sept01/2021)

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Sri Lanka guidance peg edges T-bond yield edge down

ECONOMYNEXT – Sri Lanka Central Bank’s guidance peg for interbank transactions edged down on Friday (19), while yields in Treasury bonds picked up slightly and in T-bill remain unquoted in dull trade, a day after the Central Bank announced the policy rates will remain stable, dealers said.

A bond maturing on 01. 06. 2025 closed at 27.95/28.05 percent on Friday, slightly up from 27.90/28.00 percent on Thursday.

No T-bills were quoted on Friday, dealers said.

Meanwhile Sri Lanka’s central bank announced a guidance peg for interbank transactions further weakened by three cents to 361.00 rupees against the US dollar on Friday from 360.97 rupees.

Data showed that commercial banks offered dollars for telegraphic transfers between 368.00 and 370.00 for small transactions.  (Colombo/ Aug 19/2022)

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Sri Lanka records 10 new COVID-19 deaths in 48 hours as case numbers rise

ECONOMYNEXT –  Sri Lanka recorded 10 COVID-19 deaths in the 48 hours from August 17 to 19 taking the country’s pandemic death toll to 16,640, health ministry data showed.

Sri Lanka is experiencing a slight increase in COVID-19 cases with the relaxation of public health restrictions relating to face masks and public gatherings.

Health authorities said the situation will be monitored constantly and have asked the general public to continue to follow basic hygiene measures in order to control the spread of the virus again in the community.

In August alone 2,924 new cases were recorded in Sri Lanka, with 84 deaths attributed to the disease.

So far in 2022, from January onward, health authorities have identified 81,157 patients to date.

Epidemiology unit data showed that 874 patients are currently receiving treatment, out of which 716 are receiving home based care.

The spread of the virus has increased with the use of public transport rising after an easing of a fuel crisis.

Sri Lanka is also facing difficulties in securing essential medicine supplies for the health sector due to a forex shortage.

Health officials said if the number of COVID-19 patients rise to a level the health sector cannot manage,  with the added issues of fuel and medical shortages, the health system might collapse.

“It is the responsibility of us all. There is no use trying to forcibly control people. We all have the responsibility to reduce or stop the spread of the virus before it gets out of control. We have been living with it for the past two years,” Deputy Director General of Health Services Dr Hemantha Herath said. (Colombo/Aug19/2022)

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Sri Lanka stocks gain as market consolidates after profit taking

Stock market information

ECONOMYNEXT – Sri Lanka stocks gained on Friday for the second session, with the market continues to stabilize after profit taking in two session early this week, dealers said.

The main All Share Price Index (ASPI) rose 0.73% or 65.18 points to 8,975.57, on Friday. It hit more than four-month high before falling mainly on profit taking after it gained nearly 2,000 points in 12 straight sessions through Monday.

Analysts said the buying interest in energy sector and plantation-related stocks still continuing after investors have shifted from top liquid shares, analysts said.

The market generated 3.1 billion rupees in turnover, nearly equal to this year’s average daily turnover of 3.13 billion rupees. On Thursday, the turnover slumped to more than two-week low.

Sri Lanka has already declared sovereign debt default on April 12 this year and failed to pay its first sovereign debt in May amid a deepening economic crisis which later turned into a political crisis and led to a change in the president, cabinet, and government.

The more liquid S&P SL20 index ended 0.05% or 1.62 points up at 2,963.95.

Sri Lanka is facing its worst fuel and economic crisis in its post-independence era and the economy is expected to contract more than 8 percent this year.

The main ASPI gained 16.1 percent in August so far after gaining 5.3 percent in July. It lost 9.3 percent in June, 23 percent in April, and 14.5 percent in March.

The market index has lost 27.1 percent so far this year after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.

Net foreign inflow was 40 million rupees on Friday, but the total net foreign outflow so far this year is 1.05 billion rupees.
Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.

Expolanka pushed the index up, closing 2.3 percent firmer at 223.7 rupees a share.

Sri Lanka Telecom closed 24.9 percent up at 52.7 rupees a share, and Cargills Ceylon gained 7.9 percent to 179.7 rupees. (Colombo/Aug19/2022)

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