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Saturday March 2nd, 2024

Sri Lanka repays 41-pct of US$6.3bn in forex debt due in 2021

ECONOMYNEXT – Sri Lanka has repaid 2.6 billion US dollars out of 6.3 dollars of debt denominated in foreign currency some of which were owed to domestic lenders, Central Bank’s Director of Economic Research Chandranath Amarasekera said.

“The government has foreign currency debt externally as well as locally,” Amarasekara told reporters in the second week of June.

“If you take the total of these two you are looking at 6.3 billion dollars in 2021. Out of that we have already met 2.6 billion dollars in payments and 3.6 billion US dollars remaining.”

“Most of the domestic foreign currency debt can be rolled over.”

Domestic dollar debt includes Sri Lanka Development Bonds sold to banks and other investors and also borrowings from off-shore banking units of commercial banks.

Officials have said about 350 million dollars out of a billion US dollar bond due in July was also owed to local banks.

Out of the 6.3 billion dollars in forex debt, 3.7 billion US dollars were owed to foreign investors.

Up to June 2021, 1.3 billion US dollars were paid and 2.4 billion US dollars remained.

“Essentially our concern, if at all, is the external debt service payments…” Amarasekara said.

“We are confident that we will be able to maintain the impeccable debt service payments record Sri Lanka has maintained in the past, going forward as well.”

Some of the domestically owed foreign debt however has been re-financed by banks from foreign loans.

Sri Lanka has been facing forex shortages since a Latin America style money printing central bank was set up in 1950 by a US money doctor.

Most of the central bank set up in Latin America by so-called Triffin missions of the Fed and Argentina central bank creator Raul Prebisch has ended in import substitution, sovereign default and also central bank bankruptcy and automatic dollarization. (Colombo/June16/2021 – Corrected – Headline corrected to show 41-pct debt repaid.)

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Sri Lanka eyes SOE law by May 2024 for better governance

ECONOMYNEXT – Sri Lanka is planning to pass a Public Commercial Business (PCB) Act improve governance of state-owned enterprise by May 2024 as part of an anti-corruption efforts following an International Monetary Fund assessment.

Sri Lanka’s state enterprises have been used by politicians to give ‘jobs of the boys’, appropriate vehicles for personal use, fill board of directors and key positions with henchmen and relatives, according to critics.

Meanwhile macro-economists working for the state also used them to give off-budget subsides or made energy utilities in particular borrow through supplier’s credits and state banks after forex shortages are triggered through inflationary rate cuts.

The government has taken billons of dollars of loans given to Ceylon Petroleum Corporation from state banks.

There have also been high profile procurement scandals connected to SOEs.

An SOE Reform Policy was approved by Sri Lanka’s cabinet of ministers in May 2023.

The Public Commercial Business (PCB) Act has now been drafted.

A holding company to own the SOEs will be incorporated and an Advisory Committee and Board of Directors will be appointed after the PCB law is approved, the statement said. (Colombo/Mar01/2024)

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Sri Lanka rupee closes at 308.80/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 308.80/90 to the US dollar Friday, from 309.50/70 on Thursday, dealers said.

Bond yields were broadly steady.

A bond maturing on 01.02.2026 closed at 10.65/75 percent up from 10.50/70 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent from 11.90/12.10 percent.

A bond maturing on 01.07.2028 closed at 12.15/35 percent down from 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.25/40 percent up from 12.30/45 percent.

A bond maturing on 15.05.2030 closed at 12.30/45 percent down from 12.35/50 percent.

A bond maturing on 01.07.2032 closed at 12.50/13.00 percent from 12.55/13.00 percent. (Colombo/Mar1/2024)

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Sri Lanka stocks close up 0.37-pct, Expo to de-list

ECONOMYNEXT – The Colombo Stock Exchange closed up 0.37 percent on Friday, and SG Holdings, the parent company of Expolanka Holdings Plc, said it was taking the company private.

Expolanka is the largest listed company on the Colombo Stock Exchange.

“Expolanka Holdings PLC has, at the Board Meeting held on 1st March 2024, considered a request from its principal shareholder and resolved to initiate the de-listing of the Company’s shares from the Official List of the Colombo Stock Exchange subject to obtaining necessary shareholder approval and regulatory approvals,” the company said in a stock exchange filing.

As per arrangements with SG Holdings Global Pte Ltd, the Company’s majority shareholder, it will purchase its shares from shareholders who may wish to divest their shareholding in the Company at a purchase price of Rs 185.00 per share. The share closed up at 150.50.

The broader All Share Index closed up 0.37 percent, or 39.47 points, at 10,691; while the S&P SL20 Index closed down 0.64 percent, or 19.59 points, at 3,037.

Turnover stayed above the 1 billion mark for the sixth consecutive day, registering 1.4 billion.

Crossings in Melstarcorp Plc (135mn) up at 89.50, Hatton National Bank Plc (64mn) up at 158.00, Hemas Holdings Plc (53mn) up at 75.00 and Central Finance Company Plc (26mn) up at 103.50, added significantly to the day’s turnover.

“The upward trend is continuing, with more retail buying also coming in, the number of trades was more than 10,000 today,” a market participant said. “Investors are looking for undervalued stocks and buying in quantities.” (Colombo/Mar1/2024).

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