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Thursday June 8th, 2023

Sri Lanka sees new sex workers after currency collapse, rise in STI, HIV detections

ECONOMYNEXT – Sri Lanka is seeing a rise in sexually transmitted disease detections as inexperienced sex workers enter the profession, health officials say after the country’s intermediate regime Central Bank printed money to trigger the worst currency crisis in its history.

Traditional high-risk communities including drug users and homosexual persons with multiple partners continue to be factors in the rise of STIs, according to health officials.

According to the National STD/AIDS Control Programme, 4,556 HIV patients have been recorded in the first quarter of 2022 up 11.8 percent from 4,073 in 2021 first quarter.

In the second quarter of 2022, 4,686 HIV patients have been identified, up 13.2 percent from 4,142 in 2021.

The National STD/AIDS Control Program is working with several non-governmental organizations to reach out to sex workers for testing.

Commercial Sex

“And these NGOs which we work with, say an increase in sex workers can be seen in the field in the past few months,” says Geethani Samaraweera (Consultant Venereologist) National Coordinator of the Sri Lanka Sexual Transmitted Diseases Unit (STDU) told EconomyNext.

“It can be due to the economic situation in the country. Usually, sex workers in our country try to practice safe sex and a majority of them practice safety methods when they engage in sexual activities.

“The new ones are young and they are not knowledgeable about the safety methods. They are less experienced and do not know how to convince the clients to use safety methods.

“And most of them are coming to make quick cash to provide food for their families in these economic situations therefore they can’t demand the clients sometimes as well.”

In the first quarter of 2022, 2,221 patients with other sexually transmitted diseases were identified down from 2,676 last year. In the second quarter, 2,576 patients with other STDs were found, up from 1,753 in 2021.

When currencies collapse after central banks print money to suppress interest rates, the public gets into difficulties in all countries.

In Latin America professionals including teachers and doctors have turned to sex work after soft peggers printed money to keep interest rates down.

In the UK and Europe where large volumes of money were printed money by the Federal Reserve chief Jerome Powell, and European Central Bank Chief Christine Lagarde to ‘boost jobs’, the resulting high inflation was driving people to sex work according to reports.

In Europe, the Powell-Lagarde bubble is referred to as the ‘cost of living crisis’

(Cost of living crisis pushing more women into sex work – and unable to refuse dangerous clients – Sky News)

There is strong support in Sri Lanka from macro-economists for soft-pegging for flexible exchange rates, where mistakes in targeting interest rates are covered up by depreciating the currency.

Sri Lanka’s rupee fell from 200 to 360 to the US dollar in 2022 after the central bank printed money for two years to suppress rates in a bid to boost growth.

The intermediate regime central bank has busted the rupee from 4.76 to 200 in an earlier currency crisis created in the process of printing money to suppress rates.

There have been calls to change the central bank law to block economists from practicing flexible or discretionary policy, with a reserve collecting peg generally called a dual anchor regime.

But critics say there is no hope for monetary stability with flexible inflation targeting, the latest dual anchor monetary regime peddled to the third world by Western mercantilists, also due to be legalized.

High-Risk groups

Samaraweera said a significant share of the patients being identified are below 30 years, indicating an increase in the younger generation of the country.

Of the STI patients that were identified in the first half of 2022, 1688 patients were males between the ages of 15-49 while 2610 patients were females in the same age category.

There could also be other contributing reasons for the rise, health officials say.

In addition to the rise in new commercial sex workers, other factors could also be at play. Sex workers were not the only category seeing a rise.

“From the last quarter of 2021, we saw this increase, but we thought with the Covid-19 the testing was minimized and we are seeing that numbers being identified,” Samaraweera said.

Coronavirus curfews may also have increased stress levels of sections of the public, resulting in them turning to commercial sex workers.

“Normally when these stressful times come the number of people that go to these massage parlors and sex workers increase,” Samaraweera said.

“Those can also be possible contributing factors as well for this increase in patients’ numbers.”

Members of the homosexual and transgender communities with multiple partners are also high-risk communities for STIs. Their numbers were also up. It may be due to more willingness to be tested now than earlier.

“It can be because now these communities are being more accepted in the society and the new methods we are using in order to reach out to these communities to come and do tests, because it is better to treat that letting it spread,” Samaraweera said.

“When we go back around 10 years, of the total patients around 30-35 percent were homosexuals.

“But year by year it has increased and now of the total amount higher percentage belongs to that category, especially homosexual and transgender.”

“Of the total number of patients, now it has gotten close to 60 percent. It can be either more people are coming to test themselves or the approaches we have taken in order for these communities to come forward and test themselves can be the reasons for that.”

Drug use is also contributing factor.

There may be an increase in drug usage has increased more among females as well and mainly abuse of Crystal methamphetamine (ICE) is observed.

“This has become more popular with young people making them more desirable for unprotected sexual activities,” Samaraweera said. “Even the people who usually use protection will tend not to use it after being infused with this drug.”

Increased testing and identification help contain the spread of diseases.

Better sexual education is also needed to combat HIV and STIs in general.

Younger persons were increasingly exposed to sexual content online but lack of proper guidance and education makes them more vulnerable. There was useful content online as well according to some observers.

“The children become more vulnerable to these things because there is no proper sex education in the country, in school at home or anywhere,” Samaraweera said.

“In the education system of the country, no proper sex education including hygiene, protection or the hormonal changes in the body is being included.”

There has been resistance from sections of the political ruling class to expanding sexual education for students.

An attempt to educate school children formally through a supplementary book called the Hathe Athe Potha, also led to a controversy. (Colombo/Oct15/2022)

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Sri Lanka’s shares slip on profit taking and selling pressure

ECONOMYNEXT – Sri Lanka’s shares closed lower on Wednesday after four consecutive gains in previous sessions spiraled into selling interest and profit taking, an analyst said.

The main All Share Price Index was down 0.28 percent or 24.39 points to 8,722.06, this is the lowest the index has been since May 02, while the most liquid index S&P SL20 was down 0.40 percent or 9.92 points to 2,468.44.

“The market was gaining in the previous sessions and there is selling and profit taking present today, due to continuously being on green,” an analyst said.

In the previous sessions the market was seeing gains, due to lowered policy rates and low inflation stimulating buying interest and driving the sentiment up, an analyst said.

Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier according to a revised Colombo Consumer Price Index calculated by the state statistics office.

The central bank cut the key policy rates by 250 basis points to spur a faltering economic growth as inflation was decelerating faster than it projected.

“There are gradual improvements in the market sentiment, with positive sentiments coming in from lowered policy rates and inflation,” an analyst said.

The market generated foreign inflows of 12 million rupees and received a net foreign inflow of 18 million rupees, due to low share prices and discounted shares followed by a dividend announcement.

The market generated a revenue of 554 million rupees, this is the lowest the turnover has been since May 10, while the daily turnover average was 1 billion rupees. From the total generated revenue, the banking sector contributed 120 million rupees, Diversified Banks contributed 115 million rupees and the Capital Goods Industry generated 78 million rupees.

Top losers during trade were Sampath Bank, Commercial Bank and Aitken Spence. (Colombo/June06/2023)

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Sri Lanka Treasuries yields plunge, 12-month down 318bp

ECONOMYNEXT – Sri Lanka’s Treasuries yields plunged across maturities at Wednesday’s auction with the 12-month yield falling 318 basis points, in one of the biggest one day falls, data from the state debt office showed.

The 3-month yield fell 244 basis points to 23.21 percent.

The 6-mont yield fell 339 basis points to 21.90 percent, along with the 12 months to 19.10 percent.

The short-term yield curve is inverted.

The central bank last week cut its policy rate 250 basis points in a signaling move but is not printing money to enforce the rate cut.

The debt office sold all 140 billion rupees of offered securities. (Colombo/June07/2023)

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Sri Lanka forex reserves rise US$722mn in May 2023

ECONOMYNEXT – Sri Lanka’s foreign reserves grew 722 million US dollars to 3,483 million US dollars in May 2023 from 2,761 million US dollars in April, official data showed as deflationary policy and weak credit reduced ‘above the line’ outflows.

Sri Lanka lost almost all its reserve in over two years as the central bank sold reserves and printed money to keep rates down (sterilized reserves sales) including borrowed dollars from India.

Gross official reserves fell to a low of 1,705 million US dollars in September 2022.

Sri Lanka’s central bank hiked rates in April 2022 to slow credit and also stopped printing money after it ran out of borrowed Asian Clearing Union dollars from India.

Sri Lanka’s gross official reserves are made up of both monetary reserves of the central bank and any balances of the Treasury account from loans or grants it gets.

The central bank’s net foreign reserves are still negative after busting up borrowed reserves to suppress rates. By April (before the collection of reserves in May) the central bank’s net reserves were negative by 3.7 billion US dollars.

In May alone 662 million US dollars were bought from the market, Central Bank Governor Nandalal Weerasinghe said.


No pre-determined level to stop Sri Lanka rupee appreciation: CB Governor

Borrowing dollars through swaps and busting them up, was invented by the US Federal Reserve as it was printing money and breaking the Bretton Woods system in the early 1970s.

Sri Lanka received a 350 million US dollar tranche from the Asian Development Bank and 331 million US dollars from the IMF to the Treasury for budget support.

The loans can be sold to the central bank by the government to generate rupees and spend. However, since credit is weak, not all the inflows go out of the country particularly as the central bank is conducting deflationary open market operations on a net basis.

By allowing the rupee to appreciate unlike in previous episodes of recovery in an IMF program, after a bout of money printing, the central bank is bringing down inflation – in some cases absolute prices – and restoring confidence and easing the ‘pain’ of ‘monetary policy’ or stimulus.


Why is Sri Lanka’s rupee appreciating?

Though exports are falling, tourism revenues are also picking up.

The budget support loans, tourism receipts less the reserve collected will widen the trade deficit. Building foreign reserves involves lending money to the US or other western nations and is similar to repaying foreign debt. (Colombo/June07/2023)

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