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Sunday December 3rd, 2023

Sri Lanka private credit up in August, SOE borrowings reach trillion rupees 2020

ECONOMYNEXT – Sri Lanka’s credit to private sector grew 78.3 billion rupees to 5,908.7 billion rupees, while loans to state enterprises also spiked to 40.3 billion rupees taking the total over a trillion rupees for the first time, official data showed.

Central Bank credit showed a decline of 15.4 billion rupees in August and the central bank had sold down its Treasury bill stock from 309 billion rupees on July 31 to 190 billion rupees by August 31.

Excess liquidity however went up from 147.4 billion rupees to 190 billion rupees, partly due dollar purchases.

The central bank is also printing money against contractor bills and is also giving re-finance to private banks for Coronavirus loans.

Sri Lanka’s external sector is also at risk from central bank intervention in Treasuries auctions in addition to re-finance loans, critics have warned.

A pick up in credit from new liquidity could put renewed pressure on the currency peg, analysts say or lead to spikes in domestic prices amid import controls.

Sri Lanka’s stocks have picked up amid excess liquidity and falling domestic interest rates from weak private credit up to July, despite more borrowings from the state.

In August credit to state enterprises grew 40.3 billion rupees, after growing 31.3 billion rupees in July, taking the outstanding SOE borrowings over a trillion rupees to 1,022.9 billion rupees.

Total credit from the banking system to the private and state sectors was 165.8 billion rupees down after a 199 billion rupees expansion from only state credit in July.

Up to August credit to government has topped a trillion rupees to record 1,014.1 billon rupees, and to state enterprises another 204.9 billion rupees.

Private credit in the same period was only 110.6 billion rupees, though there was a surge of 120 billion rupees in March as the rupee collapsed under a so-called ‘flexible’ exchange rate and importers rushed to cover.

Private credit was negative in May, June and July. (Colombo/Sept28/2020)

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Sri Lanka UGC wants to boost number of IT-related degrees

ECONOMYNEXT – Sri Lanka’s University Grants Commission is of the view to boost the number of Information Technology (IT) related degrees in state universities with an aim to pave the way for a digital economy.

Sri Lanka’shigher education system has been producing more graduates in Arts stream while the degrees in highly demanded IT and other engineering services are being looked at only now.

“We do have a high demand for engineering, science, AI, computer and electronical engineering

studies,” Chairman of University Grants Commission, Sampath Amaratunga, told reporters at aa media briefing on Friday

“However, while avoiding neglecting the humanities, we should develop new IT skills.”

Amaratunga confirmed that a student who studied in any stream could obtain an IT degree, including students who studied in the arts stream.

The UGC data show that out of 18,490 engineering technology stream students who sat for their Advanced Levels (A/L) in 2022, 10634 were eligible for university.

“Even streams like agriculture should be encouraged to use technology,” Amaratunga said. (Colombo/Dec 2/2023)

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Sri Lanka leader inaugurates Climate Justice Forum at COP28 in Dubai

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe launched Climate Justice Forum (CJF) at the ongoing 2023 United Nations Climate Change Conference (COP28) held in Dubai in a move to gather support for vulnerable nations hit by climate-change led disasters.

This year’s climate summit held in Dubai’s EXPO2020 features a raft of issues for countries working to find common ground in tackling climate change, including whether to phase out fossil fuels and how to finance the energy transition in developing countries.

Wickremesinghe inaugurated the Climate Justice Forum at COP28 on Saturday and emphasized the critical importance of addressing climate issues with a sense of justice and equity.

The President had been in talks with many nations vulnerable to climate change disasters including African and South American countries to get their support for the CJF.

The move is to compel advanced and developed countries to look into the poor nations hit by the climate changes and help them to get over economic and debt burdens by either investing more in green energy initiatives or writing off debts to ease financial pressure.

Sri Lanka, which is now facing an unprecedented economic crisis, has seen increasing losses and damages, both human lives and physical properties due to climate change-led disasters like floods, drought, and earth slips.

In his speech at the COP28 forum, Wickremesinghe on Friday said the Climate Justice Forum will provide a platform for constructive and proactive engagements. (Dubai/Dec 2/2023)

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Sri Lanka IMF review goes to executive board on December 12

ECONOMYNEXT – The first review of Sri Lanka’s International Monetary Fund program is scheduled to go the lender’s Executive Board for consideration on December 12.

Sri Lanka officials were expecting the review to be completed in December as soon as official creditors gave their assurances.

According to the notice Sri Lanka had missed one performance criterion and has requested modifications.

Sri Lanka has outperformed on a number of quantity targets including inflation. In addition to quantity PCs there was also one non-accumulation of arrears.

There would also be re-phasing of access. The review was originally expected around September with another review based on December data, leading to September and March disbursements.

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