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Thursday April 18th, 2024

Sri Lanka president to provide free rice for poor amid rising discontent

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe got cabinet approval to provide rice free of charge to two million lower income earners as the public discontent over his government’s policies is on the rise amid higher tax, increased electricity tariff, and lower income.

Facing possible threats of strong protests in the future, Wickremesinghe’s government was tough on anti-government agitation in capital Colombo led by Inter University Students Federation backed by a breakaway Marxists political party.

State sectors including health and education have warned of protests in the future due to higher taxes, trade unions have demanded higher salaries in the face of higher electricity tariff and lower disposable income after inflation hit a record high of 73 percent in September last year.

Wickremesinghe’s government is also facing an acid test from local government polls in which his own center-right United National Party (UNP) leaders expect a defeat.

The President, however, needs to manage the economy until it is put into a recovery path with an IMF deal, analysts say.

“The Cabinet paper presented by President Ranil Wickremesinghe for the provision of 10 kg of rice per month for two million low income families, including Samurdhi beneficiaries for a period of two months, has been approved,” President’s Media Division (PMD) said in a statement.

“Accordingly, the government will purchase 61,600 metric tons of paddy to meet the requirement of 40,000 Metric Tons. This program is proposed to be implemented by District Secretaries and Divisional Secretaries with the assistance of small and medium-scale paddy mills.”

Wickremesinghe has been largely unpopulour among rural voters due to his economic policies with tough fiscal policies. His opponents in the past have managed the economy with loose monetary and fiscal policies with higher borrowing, contributing to the current unprecedented economic crisis.

The crisis has forced the island nation to declare sovereign debt default in April last year.

Wickremesinghe has been prime minister six times since 1993, but had never completed a full term in his 46-year political career. He became the president through an unprecedented parliament election after his predecessor fled the country in July last year in the face of strong anti-government protests.

The new rice donation programme is estimated to cost 8,04 billion rupees including 6.2 billion for paddy purchase. The PMD said a budget provision of around 10 billion “will be allocated to be used if the need arises”. (Colombo/Jan16/2023)

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  1. sacre blieu says:

    Do not stand in the way of justice. Ensure that the polls take place and an atmosphere conducive to a free and fair election. Let not the last drop of life giving blood is not sucked by the insatiable appetite of the greedy that is endemic. Do not let the devil inherit your soul.

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  1. sacre blieu says:

    Do not stand in the way of justice. Ensure that the polls take place and an atmosphere conducive to a free and fair election. Let not the last drop of life giving blood is not sucked by the insatiable appetite of the greedy that is endemic. Do not let the devil inherit your soul.

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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