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Friday June 2nd, 2023

Sri Lanka president promises PM, cabinet in week

ECONOMYNEXT – Sri Lanka’s President Gotabaya Rajapaksa said he will appoint a Prime Minister who commanded the confidence of the parliament and the people and a cabinet of ministers within a week.

During this week I will work to appoint a cabinet and PM who commands a parliamentary majority and can have the people’s confidence,” President Rajapaksa said in a televised address.

“I will work to appoint a cabinet of ministers.

I will change the constitution to give more powers to parliament giving effect to the items contained in the 19th amendment. I will give the opportunity for the new govt and PM to start a new program to take the country forward.”

After stability is restored, he said he would talk to all parties and give them an opportunity to do what is needed.

President Rajapaksa called for calm and said he condemned the attack on peaceful protestors.

He said the subsequent violent actions had led to the deaths of several persons and damage to property.

The perpetrators will also be dealt with, he said.

The full statement is reproduced below:

At present, our country is facing the worst crisis in its history. The economic crisis that preceded this event created social and political instability due to the difficulties faced by the people.

As a solution to these problems, a common proposal was put forward by various parties to form a new government with a majority of parties represented in the Parliament. In the past, I have had many discussions with leaders of various parties and groups in this regard. I too accepted that idea and took some difficult and tough decisions to set the platform for this solution.

When the last Cabinet was replaced, a new Cabinet was appointed consisting of young MPs where a large number of former Senior Ministers as well as Rajapaksas were not appointed. Also, the Prime Minister resigned and an agreement was reached to dissolve the entire Cabinet and make room for a new Prime Minister and Cabinet.

But on Monday morning, May 9, as you all know, a very unfortunate situation arose. Based on this incident, riots broke out all over the country in a very short period of time. Even before the curfew was imposed and the tri-forces were deployed, this process took place in an organized manner throughout the country. Within hours, about nine people, including a Member of Parliament, were brutally beaten to death. Approximately 300 were hospitalized. Also, a large number of houses were set on fire. Looting began all over the country.

I strongly condemn without prejudice the original incident which led to these events. The IGP has been instructed to initiate investigations into the incident.

However, the series of murders, assaults, intimidation and destruction of property that followed cannot be justified. From the moment this incident took place, I have been taking steps to control the situation in the country with the involvement of the Secretary of Defence, the Chiefs of the Armed Forces, the Inspector General of Police, the Chiefs of Intelligence and the Security Council.

At this juncture, the primary responsibility of the government is to ensure the safety of all citizens. Therefore, the three Armed Forces and the Police have been ordered to strictly enforce the law against the rioters. Steps will be taken to strictly enforce the law against all those who planned, supported and promoted this incident.

Therefore, I urge everyone to refrain from such acts of sabotage. I urge the responsible citizens of this country to look at the loss of life and property that has taken place so far and to condemn the groups that continue to spread hatred. While working to ensure the security of the country, I will work with all party leaders to bring about political stability in the country.

I am taking steps to form a new government to control the current situation, to prevent the country from falling into anarchy as well as to maintain the affairs of the government that have been halted. This week, I will appoint a Prime Minister who commands the majority in Parliament and can secure the confidence of the people and a Cabinet of Ministers.

Thereafter, I will take steps to amend the Constitution to re-enact the contents of the 19th Amendment to empower that Parliament.

The new Prime Minister of the new government will be given the opportunity to present a new programme and to take the country forward. There have also been calls from various factions for the abolition of the presidential system. After the new government stabilizes the country, the opportunity will be given to discuss with everyone and to work in this regard. I request the assistance in maintaining the state machinery uninterrupted to protect the lives of the people as well as their property and to provide the essentials to the people without allowing the country to collapse at this critical juncture.

Therefore, I urge all Sri Lankans to act with restraint and prudently at this juncture.

May the Noble Triple Gem bless you all.

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Sri Lanka to ramp up weekend fuel deliveries after petrol price cut

More deaths reported at Sri Lanka fuel queues

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Petroleum Corporation will be operating on the weekend to complete all fuel deliveries to end vehicle queues forming outside fuel stations after the price revision earlier in the week, Energy Minister Kanchana Wijesekera said.

“Instructions have been given to CPC and Ceylon Petroleum Storage Terminals to continue fuel deliveries on Saturday and Sunday this week to supply sufficient stocks to all fuel stations,” Minister Wijesekera said in a TWITTER.COM MESSAGE

“To reduce expenses on overtime, CPC and CPSTL have not been operating on Sundays and public holidays in the last 4 months,” Wijesekera said.

“Non-placement of orders by fuel stations from last Saturday, anticipating a price reduction, not maintaining minimum stocks, immediate increase in demand by consumers after the price revision, and quota increase have created shortages in the fuel stations.”

The Minister in April 2023 said all fuel stations would be required to maintain a minimum of 50 percent of stock tank capacity.

“I have asked CPC to review and suspend the license of fuel stations that had not maintained minimum stocks.” (Colombo/ June 02/ 2023)

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Sri Lanka bonds yield up at close, rupee at 291.75/292.50 against the US dollar

ECONOMYNEXT – Sri Lanka’s bonds closed steady on Friday, dealers said, following the central bank’s decision to cut its main policy rate by 250 basis points.

The Spot US dollar closed at 291.75/292.50 rupees, dealers said.

The rupee opened at 290.25/75 to the US dollar Thursday and closed at 292.50/295.50 to the US dollar.

A bond maturing on 15.09.2027 closed at 24.70/90 percent up from 24.50/90 percent a day earlier, dealers said.

A bond maturing on 15.05.2026 closed at 25.75/26.25 percent up from 25.00/26.00 percent a day earlier.

A bond maturing on 01.05.2025 closed at 27.00/30 percent, up from 26.30/27.00 per cent at last close.

A bond maturing on 01.07.2032 closed at 20.25/21.00 percent, up from 20.00/40 per cent at last close.
(Colombo/ June 02/2023)

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Sri Lanka’s shares edge up on positive macroeconomic sentiments

ECONOMYNEXT – Sri Lanka’s shares closed higher in trade on Friday, over positive macro-sentiments encouraging investors to redeem their interest towards buying, an analyst said.

The main All Share Price Index was up 0.72 percent or 62.19 points to 8,753.80,  while the most liquid index S&P SL20 was up 0.68 percent or 16.87 points to 2,487.29.

Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier according to a revised Colombo Consumer Price Index calculated by the state statistics office.

Prior to the Monetary Policy investors were quite optimistic that inflation is to lower and interest rates will decrease and since exp, an analyst said.

Sri Lanka Central Bank is waiting for the government proposal on the domestic debt restructuring (DDR), the central bank governor Nandalal Weerasinghe said amid uncertainty over DDR and speculations over instability in the banking sector.

“On debt restructuring, the borrower is the ministry of finance’s treasury. Certainly we will announce what the strategy will be. We are waiting for a government proposal,” Weerasinghe said.

Sri Lanka’s investors are waiting on assurances to be made on debt restructuring and optimization, Central Bank Governor Nandalal Weerasinghe said, “It is up to the government to clear the uncertainty, because from our side we have done that part.”

The central bank cut the key policy rates by 250 basis points to spur a faltering economic growth as inflation was decelerating faster than it projected.

The speculation of DDR has hit the market and the risk premium has kept the market lending rates well above the central bank’s policy rates. The government has yet to present its plans on DDR.

Weerasinghe said the central bank has done its best to reduce the risk premium through bringing down the market lending rates while keeping the policy rates unchanged.

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.”

However Officials from IMF have said Sri Lanka has to focus on expanding taxes.

“We discussed the importance of fiscal measures, in particular revenue measures, for a return to macroeconomic stability,” Deputy Managing Director Kenji Okamura said in a statement.

The finance ministry this week issued rules requiring everyone above 18 year of age to register to pay income tax.

“I was encouraged by the authorities’ commitment to negotiate a debt strategy in a timely and transparent manner.

The market generated a revenue of 738 million rupees, while the daily average was 1 billion rupees.

Top gainers in trade were Vallibel One, LOLC Finance and Browns Investment. (Colombo/June02/2023)

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