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Sunday March 26th, 2023

Sri Lanka main opposition SJB unfazed by SLPP-UNP alliance

ECONOMYNEXT – The newly announced alliance between the ruling Sri Lanka Podujana Peramuna (SLPP) and the United National Party (UNP) is no threat to the main opposition Samagi Jana Balawegaya, according to an SJB spokesman.

SJB national list MP Tissa Attanayake told reporters on Monday January 10 that the SLPP and the UNP have joined forces because neither party enjoys enough support to contest alone.

“The UNP-SLPP alliance is in no way a challenge to the SJB,” said Attanayake.

The MP said the SJB expects to contest the polls together with all parties and organisations affiliated with the party.

The nationalist SLPP and its former rival the centre-right UNP, the party headed by President Ranil Wickremesinghe, will join forces to contest the local government elections that may or may not take place in March this year.

UNP general secretary Palitha Range Bandara told reporters following a discussion between the president and SLPP representatives on Monday that the two parties will contest the election together under the SLPP’s Pohottuwa (lotus bud) symbol for some of the local bodies, the UNP’s elephant symbol for some and a common symbol for the others.


Sri Lanka’s ruling SLPP, president’s UNP team up for local govt elections

However, it is unclear whether the local government elections will take place at all. Despite the election commission announcing January 18 to 21 as dates for accepting nominations for the local polls, there is a cloud of uncertainty over the widely anticipated election. Opposition parties continue to accuse the government of resorting to various underhand tactics to delay the election while the election commission itself is reportedly divided on whether it should go ahead with the polls.

A number of government ministers have said the cash-strapped country cannot afford to hold elections at present, while some analysts warn that an election at this juncture could derail or at least slow down Sri Lanka’s recovery process. President Wickremesinghe, though he has said he will not participate in the UNP’s election campaign, is also reportedly decidedly not in favour of an election at present, choosing instead to prioritise his mandate to bring Sri Lanka out of its worst currency crisis in decades. (Colombo/Jan10/2023)

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  1. mohamed Sulaiman says:

    RANIL RAJAPAKASHA and the Bloody RAJAPAKSHAS know their FATE if they do have an ELECTION, RANIL should BE MAN enough to face the challenge.

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  1. mohamed Sulaiman says:

    RANIL RAJAPAKASHA and the Bloody RAJAPAKSHAS know their FATE if they do have an ELECTION, RANIL should BE MAN enough to face the challenge.

Sri Lanka seeks to settle India ACU debt, credit lines over 5-years

ECONOMYNEXT – Sri Lanka has requested India to settle payments due to the country under the Asian Clearing Union mechanism and credit lines given in 2022 over 5 years, Indrajit Coomaraswamy, an advisor the island’s government said.

Sri Lanka is negotiating with India to settle the money over a 5-year period, Coomaraswamy, a former central bank governor told an online forum hosted by the Central Bank.

“Our request from the Indians is to settle it over five years,” he said. “That I think is still in the early stages of negotiation. The same with the one billion line of credit.”

Sri Lanka’s central bank owed the ACU 2.0 billion US dollars to the Asian Clearing Union according to a year end debt statement, issued by the Finance Ministry.

Sri Lanka owned India, 1,621 million dollars according to ACU data by year end, excluding interest.

India has given a 1 billion US dollar credit line to Sri Lanka as well a credit line for petroleum.

Sri Lanka in March 2024 has paid 121 million US dollar out of a 331 million US dollar IMF tranche to settle an Indian credit line.

Indian credits were given after the country defaulted in April 2022 as budget support/import when most other bilateral lenders halted giving money. (Colombo/Mar26/2023)

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Sri Lanka coconut auction prices up 1.16-pct

ECONOMYNEXT- Sri Lanka’s coconut auction prices went up by 1.16 percent from a week ago at an auction on Thursday, data showed.

The average price for 1,000 nuts grew to 83,219.45 from 82,260.58 a week earlier at the weekly auction conducted by Sri Lanka’s Coconut Development Authority on March 23.

The highest price was 92,500 rupees for 1,000 nuts up from the previous week’s 90,600 rupees, while the lowest was 76,500 also up from 70,000 rupees.

The auction offered 900,010 coconuts and 583,291 nuts were sold. (Colombo/Mar 26/2023)

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Sri Lanka in talks for billion dollar equivalent Indian rupee swap

ECONOMYNEXT – Sri Lanka is in talks with India for a billion US dollar equivalent Indian rupee central bank swap, to facilitate trade, Indrajit Coomaraswamy, ad advisor to the government said.

“The amount is still uncertain it could be up to the equivalent of a billion US dollars,” Coomaraswamy told an online forum hosted by Sri Lanka’s central bank.

The money will be used to facilate India Sri Lanka trade, he said.

India has been trying to popularize the use of Indian rupees for external trade and also encouraged Sri Lanka banks to set up Indian rupee VOSTRO accounts.

However the first step in popularizing a currency for external trade is to get domestic agents, especially exporters, to accept their own currency for trade, like in the case of the US or EU, analysts say.

India’s billion US dollar credit to Sri Lanka given during the 2022 crisis is settled in Indian rupees (transaction need).

However the Indian government itself has chosen to denominate it in US currency for debt purposes (future value).

In most South Asian nations, receivers of remittances are willing to accept domestic currencies, leading to active VOSTRO account transactions.

Sri Lanka is expected to repay a 400 million US dollar swap with the Reserve Bank of India next year under an International Monetary Fund backed program for external stability and debt re-structuring.

Central bank swap proceeds sold to banks, which are then sterilized with inflationary open market operations, can trigger forex shortages and currency crises, analysts warn.

Sri Lanka went to the International Monetary Fund after two years of inflationary monetary operations by the central bank’s issue department (money printed to suppress interest rates) triggered the biggest currency crisis in its history and external sovereign default.

Sri Lanka had gone to the IMF 16 times with similar external troubles except for the April 2003 extended fund facility under Central Bank Governor A S Jayewardene which was a purely reform-oriented program with the World Bank (PRGF/PRSP) program at a time when he was collecting reserves with deflationary monetary policy and perhaps the lowest inflation since the Bretton Woods collapsed. (Colombo/Mar26/2023)

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