An Echelon Media Company
Friday July 12th, 2024

Sri Lanka repays US$225mn to Reserve Bank of India in first quarter

ECONOMYNEXT – Sri Lanka’s central bank has repaid 225 million US dollars to the Reserve Bank of India in the first quarter of 2024, on top of earlier repayments, official data shows.

In October 2023 the Sri Lanka gave a Treasury guarantee to cover a 2,601.43 million dollar credit from RBI to Sri Lanka’s central bank.

Sri Lanka’s got deferred payments due to India via the Asian Clearing Union during the worst currency crisis triggered by rate cuts since the creation of the central bank.

According to official data the outstanding debt due to the Reserve Bank of India fell to 2,226.43 million US dollars by end March 2024 from 2,451.43 million dollars in December.

From October the central bank had repaid 375 million dollars to India.

Sri Lanka has repaid debt and also collected reserves by avoiding precipitate rate cuts.

Repaying foreign debt or collecting foreign reserves requires interest rate to be kept a little higher to crowd out domestic credit and investments.

However, if rates are cut, claiming historical inflation was low, and the below market rates are enforced with open market operations, forex shortages will develop and reserves will be run down.

Analysts have said that RBI loans and swaps, which are were used to intervene in forex markets, also led to their sterilization with new money effectively re-financing private sector credit and delaying a correction the balance of payments.

Fortunately China’s swap, was made unusable as soon as reserves fell below 3 months of imports. Central bank swaps were invented by the Federal Reserve as it printed money for ‘macro-economic policy’ in the 1960s and delay market pricing rates triggering gold (reserve) losses. (Colombo/June21/2024)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka appoints new Attorney General

ECONOMYNEXT – Sri Lanka’s President Ranil Wickremesinghe has appointed K A Parinda Ranasinghe PC as Attorney General.

He was appointed in terms of Article 61E (b) of the Constitution of Sri Lanka, the president’s media division said.

The new AG received the appointment from President Wickremesinghe at the Presidential Secretariat on Friday.

He fills the post after the retirement of former Attorney General Sanjay Rajaratnam. (Colombo/Jul12/2024)

Continue Reading

Sri Lanka rupee closes stronger at 301.70/302.00 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed stronger at 301.70/302.00 to the US dollar on Friday, from 302.80/303.00 to the US dollar on Thursday, dealers said, while bond yields were up.

A bond maturing on 15.12.2026 closed at 10.90/11.00 percent, up from 10.85/95 percent.

A bond maturing on 15.12.2027 closed at 11.75/80 percent, up from 11.80/88 percent.

A bond maturing on 01.05.2028 closed at 11.90/12.00 percent.

A bond maturing on 15.09.2029 closed at 12.10/30 percent, up from 12.15/25 percent. (Colombo/Jul12/2024)

Continue Reading

Sri Lanka stocks close up, muted activity

ECONOMYNEXT – The Colombo Stock Exchange closed up on Friday, data on its site showed.

The broader All Share Index closed up 0.35 percent, or 41.71 points, at 11,843; while the more liquid S&P SL20 Index closed up 0.56 percent, or 19.20 points, at 3,454.

Turnover was low at 653 million.

“The market picked up a bit from yesterday but it’s still below the psychological 12,000 mark,” Softlogic Stockbrokers said.

“Local retail participation drove the market predominantly.”

John Keells Holdings Plc brought in Rs109mn to the turnover, and the share closed flat at 194.50.

Melstacorp Plc contributed in Rs104mn to the turnover, and the share closed flat at 85.00.

Sentiment around the banking counters was mostly negative. Sampath Bank Plc closed down at 77.00, closed flat at 101.25, and Hatton National Bank Plc closed flat at 195.25.

The top contributors to the ASPI were Commercial Bank of Ceylon Plc (up at 103.50), Bukit Darah Plc (up at 397.00), and Hayleys Plc (up at 101.00).

Foreign participation remained low as well. There was a higher net foreign outflow of 101 million.

“Foreign selling was seen on John Keells Holdings, and banking counters; Hatton National Bank Plc (down at 195.00), Pan Asia Banking Corporation Plc (down at 20.70), and Commercial Bank of Ceylon Plc.

There was selective foreing interest on the diversified financials sector, particularly in companies that had vehicle leasing portfolios. “We think this might be due to the news of the vehicle import ban possibly ending.”

LOLC Holdings Plc closed up at 440.50, People’s Leasing and Finance Plc closed up at 12.20.

Softlogic Holdings Plc which announced the date of its rights issue, closed up at 8.50. (Colombo/Jul12/2024)

Continue Reading