Economy

Sri Lanka new monetary law fate to be decided by new administration

Sunday December 29, 2019 8:56 am

ECONOMYNEXT – Sri Lanka’s new administration will have to decide whether to pass the new central bank law that has been drawn up, but the agency would be able to run a ‘flexible’ inflation targeting regime, a top official said.

“The new government will have to look in to the proposed act and decide whether it needs amendments or they will go ahead with the same thing,” Deputy Governor Nandalal Weerasinghe said.

Weerasinghe said the process of passing a bill for a new Monetary Law Act, drawn up by the central bank and which was introduced to parliament ended when the assembly was prorogued.

The process will have to re-start from cabinet approval, Weerasinghe said.

Senior Economic Advisor to the Finance Minister Nivard Cabraal who was also an ex-Central Bank Governor has said that the new administration may decide not to pass the law.

Analysts who closely track the central bank has said that the new law does not address the principle source of monetary stability in the country, in the form of dual anchor conflicts that lead to frequent balance of payment crises and output shocks.

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Sri Lanka to institutionalize ‘flexible exchange rate’ in new monetary law

Sri Lanka not keen to enact draft monetary law

The law also institutionalized the dual anchor conflicts contained in an unstable soft-peg defined a ‘flexible exchange rate’

Economists and analysts have called for either genuine inflation target with a floating exchange rate or a East Asia hard peg or Dubia style stable peg with floating overnight rates to end monetary instability. (Colombo/Dec29/2019)

FILED UNDER: Sr Lanka economy,Sri Lanka monetary law,Sri Lanka soft-peg

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Economy

Sri Lanka exports down in April, trade deficit up from March, rupee stronger

Thursday June 1, 2023 7:05 am

ECONOMYNEXT – Sri Lanka’s exports fell 12.6 percent from a year ago to 849 million US dollars in April 2023, amid weaker external demand, while imports were down 15.8 percent to 1,431 million Us dollars, central bank data showed.

Exports also fell 1,037 million dollars in March 2023, amid seasonal effects.

The trade deficit expanded to 583 million US dollars in April from 412 million US dollars in March 2023. Imports were at 1431 million US dollars in April from 1,450 million dollars in March.

Imports can pick as tourism, worker remittances and net inflows to government go up.

The rupee continued to appreciate.

“Exchange rate showed a notable appreciation during April 2023 with the continued improvement in liquidity in the domestic foreign exchange market, the discontinuation of the daily guidance on exchange rates,” the central bank said.

Up to April exports were down 9 percent to 3.8 billion rupees and imports were down 28 percent to 5.2 billion rupees and the trade deficit was 1.4 billion rupees.

Investment goods imports were down in April amid a contraction in credit.

“Almost all types of goods listed under the three main investment good categories, namely machinery and equipment, building material and transport equipment, recorded a decline,” the central bank said.

Economy

Sri Lanka President discusses debt restructure, program progress with IMF

Thursday June 1, 2023 6:14 am

ECONOMYNEXT – Sri Lanka’s President Ranil Wickremesinghe has discussed progress of International Monetary Fund program and debt restructuring during a visit of Deputy Managing Director Kenji Okamura, statement said.

“The discussion primarily focused on the progress of the IMF program between Sri Lanka and the IMF,” a statement from President’s office said.

“Attention was also paid to the on-going debt restructuring negotiations.”

State Minister of Finance Shehan Semasinghe, Senior Advisor to the President on National Security and Chief of Presidential Staff Sagala Ratnayake was also in the meeting.

Secretary of the Ministry of Finance Mahinda Siriwardena, Central Bank Governor Nandalal Weerasinghe, Deputy Director of the International Monetary Fund Anne Marie Gulde, and Resident Representative IMF in Sri Lanka Sarwat Jahan, attended this event. (Colombo/June01/2023)

Energy

Sri Lanka cuts petrol to Rs318 a litre, kerosene to Rs245

Wednesday May 31, 2023 10:29 pm

ECONOMYNEXT – Sri Lanka has cut petrol 92-Octane by 15 rupees to 318 rupees a litre and kerosene by 50 rupees to 245 rupees a litre from midnight May 31, the Ministry of Energy said.

Petrol 95 Octane will be raised by 20 rupees to 385 rupees, and Lanka Super Diesel 4 Star Euro 4 will be raised by 10 rupees to 340 rupees a litre.

Lanka Industrial Kerosene will be cut by 60 rupees a litre to 270 rupees.

Kerosene which is similar to jet fuel is usually the most expensive fuel in international markets followed by diesel and petrol is usually the cheapest.

Kerosene which is substantially cheaper than diesel is also used by buses to cut costs. (Colombo/May31/2023)