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Wednesday February 1st, 2023

Sri Lanka looking to purchase Russian oil at discounted pricing: foreign minister

ECONOMYNEXT — Sri Lanka is pursuing the option of purchasing crude oil from Russia at discounted rates and has had several rounds of talks with Moscow in that regard, Foreign Minister Ali Sabry said.

In an interview with India’s WION television network, Sabry said on Wednesday November 23 that Sri Lanka would “want to work with Russia” without violating international norms or laws.

“We have been disproportionately affected by the Russian conflict, so we pray and urge everybody to quickly and diplomatically and by dialogue resolve this. We have been affected big time in terms of petroleum, crude oil and coal prices, as well as grain prices and escalating prices of fertilizer,” said Sabry.

“These are lifelines for our people. There are 33 percent of Sri Lankans involved in agriculture,” he added.

The minister reiterated that the ongoing conflict between Russia and Ukraine has disportionately impacted Sri Lanka on top of its ongoing currency crisis, the worst in decades.

“With our depreciating rupee, prices have gone up four, five times more. So it has been really difficult for Sri Lankans.

“On top of that, Russia and Ukraine both had been among our top 10 countries in tourism arrivals to Sri Lanka,” he said, noting that the two countries are two important export destinations for Sri Lanka as well.

“Going forward, if there is a way to deal with Russian oil, why not, we want to. These kinds of price escalations are unaffordable to us,” said Sabry.

“As our president put it, when the elephants fight, it’s the grass that gets trampled,” he added.

The minister said Sri Lanka has enjoyed good diplomatic relations with Russia for a long time.

In September, Power & Energy Minister Kanchana Wijesekera said Sri Lanka cannot import oil directly from Russia under current procurement rules. The minister sought the help of a finance committee under opposition legislator Harsha de Silva.


Sri Lanka minister seeks parliament panel help to import Russian crude

Some pro-Russia former government ministers who now sit in the opposition had also urged the government not to overlook “traditional ally” Russia in its efforts to overcome a worsening economic crisis, particularly with regard to ongoing negotiations with the International Monetary Fund (IMF).

“The IMF has never mentioned Russia, Russian oil, or the Ukraine war,” MP Wimal Weerawansa, the leader of this group, said in parliament in June.


Sri Lanka must not overlook Russia in favour of IMF, says MP Weerawansa

In his WION interview on Wednesday, Minister Sabry said discounted pricing will not be a problem to many countries as “no one wants Russian oil to be out of the market”.

“The moment Russian oil goes out of the market, there will be a scarcity, and that will probably shoot up the prices creating economic upheaval in terms of restrictions or something of that sort. I don’t think anyone wants that,” he said.

Asked if Sri Lanka has spoken to India on the matter, the minister said the government has taken it up with Moscow in several rounds of discussions.


“We have had several rounds of discussion with Moscow. Yes, we are pursuing that option. We’re keeping that option open either directly or through India,” he said. (Colombo/Nov24/2022)

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Sri Lanka shares edge up at close

ECONOMYNEXT- Sri Lanka’s shares edged up on Wednesday pushed as investors bought in to beaten down shares following the previous session’s drop, market analyst said.“

At this price level what we are seeing is a lot of confidence from the investors to collect when the prices drop. So, the market is not falling sharply,” a market analyst said.

Market had also seen buying in Expolanka shares on speculation that the parent company of SG Holdings was buying back into the shares.

All Share Price Index (ASPI) edged up by 0.96 percent or 84.96 points to 8,950.01.

The most liquid index S&P SL20 gained 1.27 percent or 35.02 points to 2,799.53.

Banking and Insurance counters had seen interest on the back of positive sentiments from the IMF.

The central bank has said it could cut interest rates in future when the the country sees fall in inflation, which has already started decelerating.

The market saw a turnover of 1.5 billion rupees today,lower than the month’s daily average of 1.8 billion rupees and nearly half of 2022 average turnover of 2.9 billion rupees.

The bourse saw a flow of net foreign inflow of 45 million rupees extending the net offshore buying to 1.9 billion so far this year.

Top gainers of the day were Commercial Bank, Expolanka, and Ceylinco Insurance. (Colombo/Feb01/2023)






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Sri Lanka bond yields down at close

ECONOMYNEXT – Sri Lanka’s bond yields were down at close following a bond auction on Wednesday, dealers said while a guidance peg for interbank transactions remained unchanged.

“The rates were steady at the auction,” a dealer said.

“This can be a signal to the market saying the rates will go down in the future.”

A bond maturing on 01.07.2025 closed at 32.40/60 percent, down from yesterday’s 32.60/85 percent.

A bond maturing on 01.05.2027 closed at 29.10/35 marginally down from yesterday’s 29.20/75 percent.

The Central Bank’s guidance peg for interbank US dollar transactions remained unchanged at 362.14 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 371.38 rupees on Friday, data showed. (Colombo/Feb 01/2022)

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Sri Lanka bill auction hits pothole after 2025 bond spike

ECONOMYNEXT – Sri Lanka sold only 45 billion rupees in Treasury bills at Wednesday’s auction after offering 120 billion rupees, data from the state debt office showed, amid market confusion over a spike in a two year bond at an earlier action.

30.1 billion rupees of 3-month bills were sold at 29.91 percent, unchanged from a week earlier after offering 60 billion rupees for auction.

5.1 billion rupees of 6-month bills were sold at 28.72 percent, flat after offering 30 billion.

10.3 billion rupees of 12-month bills were sold at 27.72 percent after offering 30 billion.

Phase II subscriptions have been opened.

The market was foxed after the 2025 bonds were accepted at sharply higher yield than market on January 30, dealer said.

There was further confusion as the there was an outright purchase of 2025 at around 29 percent earlier in January.

Some investors speculated that the authorities were trying to drive more buyers towards short end bonds as bill volumes were getting larger. (Colombo/Feb01/2023)

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