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Wednesday June 7th, 2023

Sri Lanka newspaper circulation falls for second straight year

ECONOMYNEXT – Sri Lanka’s newspaper circulation has fallen for the second straight year in 2018, with diminishing readership across all three languages, central bank data showed.

Annual circiulation of daily national newspapers fell to 368 million in 2018, down from 398.7 million a year earlier, after reaching a historical peak of 411.8 million in 2016.

Weekly newspaper circulation fell to 113.3 million in 2018 after peaking at 136.3 million in 2017.

The central bank had collected circulation data from newspaper publishers and the Mass Media Ministry.

Critics have alleged publishers are overstating circulation data to boost advertisement revenues.

The highest fall was among Sinhala newspapers, with annual circulation of daily publications falling 11.2 percent to 217.6 million and weekly copies falling 20.3 percent to 113.3 million.

Tamil daily newspaper circulation fell marginally by 0.5 percent to 59.96 million and weeklies fell 1.8 percent to 19.1 million copies.

English daily newspaper circulation fell 3 percent to 90.6 million and weekly distribution fell 2.7 percent to 24.7 million copies.

The daily newspaper copies per thousand persons distributed fell to 54 in 2018 from 59 a year earlier, while 101 copies were sold in weekly publications, down from 122.

Newspaper circiulation had grown at an annual rate of 14 percent for seven years up to 2016, after recording the only fall in the past 20 years in 2008.

Sri Lanka has followed a similar trend to India, the world’s largest newspaper consumer, where circulation continued to grow and peaked at 610.2 million per day in 2015/16 (year ending in March), according to the Office of Registrar of Newspapers for India data.

Daily newspaper circulation in India then fell to 488.1 million copies in 2016/17 and 430 million in 2017/18.

Newspaper circulation in many other countries have been falling over the past decades with a higher consumption of online media and cable news.

In Japan, another large newspaper consumer, circulation has fallen from 53 million copies daily (morning and evening editions were counted as one)  in 2004 to 39.9 million copies in 2018, according to the Japan Newspaper Association.

In the US, newspaper readership has been dwindling since 1990 according to the Pew Research Centre, with circulation in 2018 falling to the same levels as 1940.


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Sri Lanka Treasuries yields plunge, 12-month down 318bp

ECONOMYNEXT – Sri Lanka’s Treasuries yields plunged across maturities at Wednesday’s auction with the 12-month yield falling 318 basis points, in one of the biggest one day falls, data from the state debt office showed.

The 3-month yield fell 244 basis points to 23.21 percent.

The 6-mont yield fell 339 basis points to 21.90 percent, along with the 12 months to 19.10 percent.

The short-term yield curve is inverted.

The central bank last week cut its policy rate 250 basis points in a signaling move but is not printing money to enforce the rate cut.

The debt office sold all 140 billion rupees of offered securities. (Colombo/June07/2023)

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Sri Lanka forex reserves rise US$722mn in May 2023

ECONOMYNEXT – Sri Lanka’s foreign reserves grew 722 million US dollars to 3,483 million US dollars in May 2023 from 2,761 million US dollars in April, official data showed amid weak credit and better inflows.

Sri Lanka lost almost all its reserve in over two years as the central bank sold reserves and printed money to keep rates down (sterilized reserves sales) including borrowed dollars from India.

Gross official reserves fell to a low of 1,705 million US dollars in September 2022.

Sri Lanka’s central bank hiked rates in April 2022 to slow credit and also stopped printing money after it ran out of borrowed Asian Clearing Union dollars from India.

Sri Lanka’s gross official reserves are made up of both monetary reserves of the central bank and any balances of the Treasury account from loans or grants it gets.

The central bank’s net foreign reserves are still negative after busting up borrowed reserves to suppress rates. By April (before the collection of reserves in May) the central bank’s net reserves were negative by 3.7 billion US dollars.

In May alone 662 million US dollars were bought from the market, Central Bank Governor Nandalal Weerasinghe said.


No pre-determined level to stop Sri Lanka rupee appreciation: CB Governor

Borrowing dollars through swaps and busting them up, was invented by the US Federal Reserve as it was printing money and breaking the Bretton Woods system in the early 1970s.

Sri Lanka received a 350 million US dollar tranche from the Asian Development Bank and 331 million US dollars from the IMF to the Treasury for budget support.

The loans can be sold to the central bank by the government to generate rupees and spend. However, since credit is weak, not all the inflows go out of the country particularly as the central bank is conducting deflationary open market operations on a net basis.

By allowing the rupee to appreciate unlike in previous episodes of recovery in an IMF program, after a bout of money printing, the central bank is bringing down inflation – in some cases absolute prices – and restoring confidence and easing the ‘pain’ of ‘monetary policy’ or stimulus.


Why is Sri Lanka’s rupee appreciating?

Though exports are falling, tourism revenues are also picking up.

The budget support loans, tourism receipts less the reserve collected will widen the trade deficit. Building foreign reserves involves lending money to the US or other western nations and is similar to repaying foreign debt. (Colombo/June07/2023)

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SriLankan Airlines expects $50 mln profit in FY 2023/24 

ECONOMYNEXT – Sri Lanka’s loss making national carrier is aiming to earn a profit of 50 million US dollars, its Chief Executive Officer said, after it incurred a loss of nearly 500 million US dollars in the previous financial year.

“I think the outlook for next year is even stronger,” Richard Nuttall, CEO at SriLankan said in an interview with Channel News Asia.

“Assuming that the world stays the same in the year ahead, we expect Sri Lanka’s economy to rebound and tourism to come back, we are forecasting $50 million profit next year,” he said.

‘The Airlines incurred a whopping loss of 168.6 billion Sri Lanka rupees in the financial year 2021/22 ended in March 31, 2022, compared to the loss of 49.7 billion rupees in the previous year, the Sri Lankan has said in the past.

SriLankan Airlines is one of the 52 loss making state enterprises that the International Monetary Fund had recommended for restructuring. President Ranil Wickremesinghe’s government has been considering absorbing the cumulative losses of more than $1 billion and privatizing the national career.

Nuttall said though the currency depreciation did not have any impact on the profitability last year, the country’s short supply of jet fuel hurt the airline.

“So if you look at the year we just had, the year started with the economic challenges in the country in Sri Lanka. We had travel advisories. and the country ran out of jet fuel in July and August. I have never worked for an airline which does not have jet fuel in its home country before,” he said.

“So everything had to stop in India. We lost payload.” (Colombo/June 07/2023)

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