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Thursday April 18th, 2024

Sri Lanka orders banking, transport, petroleum, food, state offices essential services

ECONOMYNEXT – Sri Lanka has declared a series of state services, utilities and banking as shortages of some foods emerge amid price controls and leading to queues shortly after a military major general was made the commissioner general of essential services under emergency regulations.

Sri Lanka rupee is falling after two years of money printing to keep rates down depleted forex reserves and made it difficult to repay debt.

Convertibility has been lifted for most trade transaction, and the rupee has fallen close to 230 rupees in the over-the-counter market for importers and importers.

There is no trading in the interbank spot market and forward cover is not available for importers.
Sri Lanka on September 02 slapped price controls on sugar and rice.

The Consumer Affairs Authority through its price controls created shortages in cooking gas by putting a private firm out of business.

A price increase has since been granted. Economic analysts who were watching money printing had warned of economic controls that will come.

“When the rupee starts to fall, the price controls will come. The Consumer Affairs Authority (CAA) had already stopped Laugfs Gas,” EN’s economics columnist warned earlier.

“It will impose many more price controls. Many more shortages will occur. It will be a big threat to the ordinary people. People will be branded ‘black marketers’.”

This week sugar stocks were seized by authorities saying they were ‘hoarders’. Like black marketers hoarders are also a favourite scapegoat in times of monetary instability.

Roman Emperor Dicletian who debased silver and gold money with copper and depreciated the currency decreed death for hoarders.

The full list of service declared essential service are listed below:

All services, works or labour of any description carried out or required to be carried out by or in
with the Sri Lanka Ports Authority established by the Section 3 of the Sri Lanka Ports Authority Act, No. 51 of 1979.

2. The supply and distribution of all fuels, including petroleum products and liquefied gas

3. All services, works, labour of any description whatsoever, necessary or required to be carried out in connection with the discharge, carriage, landing, storage, delivery and removal of oil or fuel from vessels within any port, as defined as such, for the purposes of the Customs Ordinance

4. Freight transport by Sri Lanka Railway Department and all public transport services carried out by the Sri Lanka Transport Board for passenger transport

5. Maintenance, security and operational aspects that are essential to carry out such public services in line with service requirements

6. All type of services, works, or labour contributions which should be carried out or required to be carried out by District Secretariats, Divisional Secretariats, Grama Seva Officers, Samurdhi Development Officers, Agricultural Research Assistants including all field level officers of all District and Divisional Secretariats.

7. All state banking and insurance services including the Central Bank of Sri Lanka.

8. Waste management services carried out by the Local Authorities

9. All services, works or labour of any description necessary or required to be carried out in connection with supply, storage and distribution activities of food, beverages including all other essential consumable items to public which performed by Lanka Sathosa Ltd, Co-operative Wholesale Establishment, Food Commissioner Department, Department of Co-operative Development, Co-operative Societies & Paddy Marketing Board, Ceylon Sugar (Pvt.) Ltd.

10. All services, work or labour of any description to be performed by or required by all government offices under the Provincial Councils

11. All Services, works or labour of any description to be performed or required by in connection with health services

12. Acceptance and delivery of local and foreign letters, printed materials and parcels, provisions of postal related
information, registered letters cash on delivery (COD), local and foreign Express Mail Service (speed post/EMS),
special services of delivery of pharmaceuticals and money transactions and all other activities relating to the
postal services in operation under the Postal Department.

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Sri Lanka’s discussions with bondholders constructive: State finance minister

ECONOMYNEXT – Sri Lankan authorities continue to engage all debt restructuring negotiations in good faith, within principles of equitable treatment among creditors, and with maximum transparency within the norms of such negotiations, State Minister of Finance, Shehan Semasinghe has said.

“It is standard practice, when a representative group of bondholders is formed, to entertain confidential discussions with such group and its appointed advisors. In the case of Sri Lanka, the Ad Hoc Group of Bondholders represents holders controlling more than 50% of the bonds, which make them a privileged interlocutor for Sri Lanka,” Semasinghe said on X (twitter).

“It is well understood that given the price sensitive nature of the negotiations, and according to market regulations, discussions with the Group and its advisors are to be conducted under non-disclosure agreements. This evidently restricts the ability of the Government to unilaterally report about the substance of the discussions.

“The cleansing statement, which was issued on the 16th of April, at the conclusion of this first round of confidential discussions with members of the Group, aims at informing the Sri Lankan people, market participants and other stakeholders to this debt restructuring exercise, about the progress in negotiations. It provides the highest possible level of transparency within the internationally accepted practices in such circumstances.

“As informed in this statement, confidential discussions held in recent weeks with bondholders’ representatives proved constructive, building on the restructuring proposals presented by both parties. During the talks both sides successfully bridged a number of technical issues enabling important progress to be made. Sri Lanka articulated key remaining concerns that need to be addressed in a satisfactory manner.

“The next steps would entail further consultation with the IMF staff regarding assessments of the compatibility of the latest proposals with program parameters. Following these consultations, we hope to continue discussions with the bondholders with a view to reaching common ground ahead of the IMF board consideration of the second review of Sri Lanka’s EFF program.”

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Sri Lanka rupee weakens at 301.00/302.05 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 301.00/302.05 to the US dollar in the spot forex market on Tuesday, from 299.00/10 on Tuesday, dealers said. Bond yields were broadly steady.

A bond maturing on 15.12.2026 closed stable at 11.30/35 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent up from 11.95/12.00 percent.

A bond maturing on 15.12.2028 closed at 12.10/20 percent down from 12.10/15 percent.

A bond maturing on 15.07.2029 closed at 12.25/40 percent.

A bond maturing on 15.03.2031 closed at 12.30/50 percent. (Colombo/Apr17/2024)

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Sri Lanka Treasury Bill yields down across maturities

ECONOMYNEXT – Sri Lanka’s Treasuries yields were down across maturities at Wednesday’s auction with the 3-month yield moving down 7 basis points to 10.03 percent, data from the state debt office showed.

The debt office sold all 30 billion rupees of 3-month bills offered.

The 6-month yield fell 5 basis points to 10.22 percent, with 25 billion rupees of bills offered and 29.98 billion rupees sold.

The 12-month yield dropped 4 basis points to 10.23 percent with 18.01 billion rupees of bills sold after offering 23 billion rupees. (Colombo/Apr17/2024)

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