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Friday January 27th, 2023

Sri Lanka relaxes six-week COVID-19 “lockdown”, but some restrictions remain

ECONOMYNEXT – Sri Lanka’s six-week COVID-19 lockdown, or ‘quarantine curfew’ as it is officially known, was relaxed Friday (01) morning, though some restrictions such as an inter-provincial travel ban remain.

The health ministry issued new guidelines on Thursday (30) to be followed by the public in the coming weeks in order to prevent a fresh wave of daily cases which have seen a gradual decline over the past few weeks.

No non-essential travel or any type of public gathering is permitted from 10pm to 4am every day, until further notice.

The new guidelines have been divided into two periods: October 01 to 15 and October 16 to 30 (see images below for details).

Dining in at restaurants, and low and medium risks sports will be only permitted after October 16. Food delivery is allowed as it was during the lockdown, according to the guidelines.

Private tuition classes , cinemas, theatres, exhibitions and conventions remain closed until further notice.

Walkways and beaches will be open for public use, though public gatherings such as beach parties are not permitted.

Until October 15, weddings are allowed with a maximum of 10 participants. Fifty guests will be allowed from October 16 but without liquor being served.

The health ministry said any organiation or person that poses a threat to the control of COVID-19 by non-adherence to the guidelines will be strictly dealt with under the existing legal provisions.

The situation will be reviewed the end of the month and appropriate guidelines on the permitted level of functions will be issued.

“We have been informed to suspend inter-provincial public transport for another two weeks. Therefore no buses or trains will be operating between provinces,” State Minister for Transportation Dilum Amunugama told reporters on Thursday.

“Only private and Sri Lanka Transportation Board (SLTB) will operate inside each province. We have been advised by health officials to not to operate trains even inside the provinces to minimise the spreading.”

Amunugama said busses will only be allowed to transport passengers per the number of seats available any public transport driver that carries more passengers than the number of seats will be arrested.

“We will also increase the number of busses in areas where a higher number of people uses public transport to commute to work, such as in the Western province.”

“All workplaces should reduce the number of employees coming into work at a given time and where possible adopt a work from home routine. Essential services and industries are exempted and others should function with minimum required numbers, as decided by the head of the institute,” the ministry said.

There should be a sensitive monitoring system for public and work settings on their adherence to precautions, it added.

“If not all gains from restrictions imposed over a one-month period would be lost.”

Sri Lanka initially decided to go for a 10-day nationwide lockdown on August 20 after ignoring repeated calls from experts. With patients’ number continuing to increase, the lock down continued to be extended several times until October 01.

Meanwhile, the Sri Lanka Medical Association (SLM) has proposed a “restrained, phased, and well-monitored” exit strategy for the lockdown in order to avoid another wave of the epidemic. The SLMA issued a series of recommendations Wednesday afternoon on gradually reopening the country.

Related: Sri Lanka Medical Association proposes “restrained” easing of COVID-19 restrictions

Health authorities have also called for a staggered easing of the restrictions.

Related: Sri Lanka health official calls for staggered lifting of COVID-19 lockdown

Critics, however, have argued that Sri Lanka’s lockdown was not as stringent as it could’ve been, with widespread reports on social media of life almost being back to normal, at least for a section of society.

Regardless, daily cases of COVID-19 have seen a not insignificant drop, at the end of the quarantine curfew period. On Thursday (28), 912 new infections were reported, with 59 deaths confirmed for Wednesday.

This was the third consecutive day with few than 1,000 confirmed cases. (Colombo/Oct01/2021)

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Sri Lanka shares fall at market close on profit taking

ECONOMYNEXT – Sri Lanka shares fell on Thursday as profit taking entered the market mainly on financial and diversified sectors, brokers said.

The main All Share Price Index (ASPI) fell 0.13 percent or 11.50 points to close at 8,926.56.

“The market was trading on dull trade mainly due to profit taking,” an analyst said.

“Also we saw investors taking a sideline as quarterly reports started to come”.

The earnings in the first quarter of 2023 are expected to be negative with revised up taxes and an imminent electricity tariff hike.

Earnings in the second quarter are expected to be more positive with the anticipation of IMF loan and possible reduction in the market interest rates as the tax revenue has started to generate funds.

The central bank’s policy decision was expected and investors have been eying on IMF deal with hopes of rapid economic recovery from the current unprecedented economic crisis, however since the market gained in the last sessions profit taking has come about, analysts said.

The market has been on a rising trend on the hopes of a faster IMF deal. However, the central bank government said the IMF deal is likely in the quarter or in the first month of the second quarter.

The most liquid index S&P SL20 fell  0.33 percent or 9.21 points to 2,798.

LOLC had seen some attention by investors as the firm disposed 90,256,750 shares held with Agstar PLC at 15-17.50 rupees a share.

The market witnessed a turnover of 1.2 billion rupees, lower than the month’s daily average of 1.9 billion rupees.

Expolanka dragging the market down closed 2.36 percent down at 186.7 rupees a share. Sampath bank fell 1.41 percent to close at 42 rupees a share while Royal Ceramic Lanka closed 2.59 percent dwn at 30.1 rupees a share.

(Colombo/Jan26/2023)

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Sri Lanka bonds yields steady at close

ECONOMYNEXT – Sri Lanka bond yields were steady at close on Thursday, dealers said, while a guidance peg for interbank transactions by the Central Bank remained steady.

A bond maturing on 01.05.2024 closed at 31.00/20 percent unchanged from the last close.

A bond maturing on 15.05.2026 closed at 26.60/90 percent, up from 28.50/70 percent on Wednesday.

A bond maturing on 15.09.2027 closed at 28.60/85 percent, up from 28.50/60 percent at the last close.

The three months bill closed at 29.75/30.25 percent unchanged from the last close.

The Central Bank’s guidance peg for interbank US dollar transactions appreciated by another 2 cents to 362.14 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 360.49 rupees on Thursday, data showed.  (Colombo/Jan 26/2022)

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Sri Lanka central bank workers protest tax hike as governor defends painful measures

ECONOMYNEXT – Employees of Sri Lanka’s Central Bank have joined a week-long “black protest” campaign organised by state sector unions against a sharp hike in personal income tax, even as Central Bank Governor Nandalal Weerasinghe said painful measures were needed for the country to recover from its worst currency crisis in decades.

President of the Central Bank Executive Association Jayadu Perera told EconomyNext on Friday January 26 that while the protesting CBSL staff were not opposed to paying taxes, they take issue with the unprecedented increase which came into effect in the new year.

Perera claimed that the tax he paid in December had increased six-seven fold.

“This is true for most public servants, and we cannot bear this burden,” he said.

“This is a very unfair tax since it is the professionals of this country that make all the sacrifices,” he added.

Perera complained that Sri Lanka’s ruling class maintain high living standards and enjoy all the luxuries while subjecting workers like him to an “extremely unfair and unjust” tax.

Opposition to Sri Lanka’s newly increased direct taxes has been rising, with a number of unions and professional associations taking to the streets demanding that the decision is reversed.

The government, however, defends the tax hike arguing that it is strapped for cash as Sri Lanka, still far from a complete recovery, is struggling to make even the most basic payments, to say nothing of the billions needed for public sector salaries.

Economists say Sri Lanka’s bloated public service is a burden for taxpayers in the best of times, and under the present circumstances, it is getting harder and harder to pay salaries and benefits.

Defenders of the tax hike say that the road to recovery is a painful one, and Central Bank chief Weerasinghe, meanwhile, told reporters at the monthly monetary policy review on Wednesday January 25 that the country would have to take certain painful measures to come out of the crisis.

Asked about the trade union action organised by his staff – with most employees dressed in black – Weerasinghe joked that he too was in black but said in a more serious vein that at CBSL, anyone was free to exercise their democratic right to protest.

He also stressed that taxation is not under the purview of the Central Bank whose primary obligation is monetary policy.

The CBSL staff, however, continues to protest.

“This tax increase was implemented without any discussion with workers who are the victims of this policy,” claimed Perera.

Acknowledging the country’s dire financial straits, he said: “But why must only the professionals make sacrifices? Why not the politicians?”

Another worker who did not wish to be named claimed that he was left with just 10,000 rupees after tax.

“This an intolerable burden laid upon our heads. We will continue this protest until they give us relief. Today we did it during the lunch break. In the future we will do more,” he said.

Other workers who shared these sentiments told EconomyNext that most of them have debt obligations of their own and once they have settled loans, interest and other bills, a large income tax is the last straw.

“We have our own personal commitments. All we say is that taxation should be fair, transparent and equitable. Show us the rulers that are being taxed the same way,” said one CBSL worker.

Sri Lanka’s new tax regime has both its defenders and detractors. Critics who are opposed to progressive taxation said it serves as a disincentive to industry and capital which can be invested in business. They argue that a flat rate of taxation is implemented where everyone is taxed at the same rate.

Others, however, contend that the new taxes only affect some 10-12 percent of the population and, given the country’s economic situation, is necessary, if not vital.

Critics of the protesting workers argue that most of the workers earn high salaries that most ordinary people can only dream of, and though there may be some cases where breadwinners could be taxed more equitably, overall, Sri Lanka’s tax rates remain low and are not unfair. (Colombo/Jan26/2023)

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