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Thursday April 18th, 2024

Sri Lanka slaps price controls on sugar, rice amid money printing

ECONOMYNEXT – Sri Lanka’s Consumer Affairs Authority, an agency that has created shortages in the past by controlling the price of tinned fish, lentils and liquefied petroleum gas has slapped price controls on rice and sugar.

The Consumer Affair Authority has slapped a wholesale price of 116 rupees a kilogram for importers, and 122 rupees for retail whether in bulk and 12 rupees in packets.

Brown sugar made by state-run Lanka Sugar and imports restricted to give high profits or rents has been set 125 rupees in bulk and 128 rupees for packets.

The controlled price of Keeri Samba had been set at 125 rupees a kilogram.

White/Red Samba steamed boiled (excluding Suduru Samba) had been set at 102 rupees per kilogram.

White/Red Nadu, steamed or boiled (excluding Mottaikarupan and Attakari) has been set at 98 rupees.

White/Red Raw Rice had been set up 95 rupees.

International commodity prices have moved sharply up as the US Federal Reserve printed money triggering a Powell Bubble.

Sri Lanka also printed money, defending the action saying the US was also printing money triggering forex shortages and massive balance of payments deficits.

The rupee has now fallen to around 230 to the US dollar from around 195 rupees before money printing under the so-called Modern Monetary Theory.

Authorities are now targeting wholesalers and traders claiming they are ‘hoarding’.

Similar charges have been made against traders in the 1970s when a large volume of money was printed and the central bank was the biggest buyer of Treasury bills with printed money. (Colombo/Sept03/2021)

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Sri Lanka’s discussions with bondholders constructive: State finance minister

ECONOMYNEXT – Sri Lankan authorities continue to engage all debt restructuring negotiations in good faith, within principles of equitable treatment among creditors, and with maximum transparency within the norms of such negotiations, State Minister of Finance, Shehan Semasinghe has said.

“It is standard practice, when a representative group of bondholders is formed, to entertain confidential discussions with such group and its appointed advisors. In the case of Sri Lanka, the Ad Hoc Group of Bondholders represents holders controlling more than 50% of the bonds, which make them a privileged interlocutor for Sri Lanka,” Semasinghe said on X (twitter).

“It is well understood that given the price sensitive nature of the negotiations, and according to market regulations, discussions with the Group and its advisors are to be conducted under non-disclosure agreements. This evidently restricts the ability of the Government to unilaterally report about the substance of the discussions.

“The cleansing statement, which was issued on the 16th of April, at the conclusion of this first round of confidential discussions with members of the Group, aims at informing the Sri Lankan people, market participants and other stakeholders to this debt restructuring exercise, about the progress in negotiations. It provides the highest possible level of transparency within the internationally accepted practices in such circumstances.

“As informed in this statement, confidential discussions held in recent weeks with bondholders’ representatives proved constructive, building on the restructuring proposals presented by both parties. During the talks both sides successfully bridged a number of technical issues enabling important progress to be made. Sri Lanka articulated key remaining concerns that need to be addressed in a satisfactory manner.

“The next steps would entail further consultation with the IMF staff regarding assessments of the compatibility of the latest proposals with program parameters. Following these consultations, we hope to continue discussions with the bondholders with a view to reaching common ground ahead of the IMF board consideration of the second review of Sri Lanka’s EFF program.”

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Sri Lanka rupee weakens at 301.00/302.05 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 301.00/302.05 to the US dollar in the spot forex market on Tuesday, from 299.00/10 on Tuesday, dealers said. Bond yields were broadly steady.

A bond maturing on 15.12.2026 closed stable at 11.30/35 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent up from 11.95/12.00 percent.

A bond maturing on 15.12.2028 closed at 12.10/20 percent down from 12.10/15 percent.

A bond maturing on 15.07.2029 closed at 12.25/40 percent.

A bond maturing on 15.03.2031 closed at 12.30/50 percent. (Colombo/Apr17/2024)

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Sri Lanka Treasury Bill yields down across maturities

ECONOMYNEXT – Sri Lanka’s Treasuries yields were down across maturities at Wednesday’s auction with the 3-month yield moving down 7 basis points to 10.03 percent, data from the state debt office showed.

The debt office sold all 30 billion rupees of 3-month bills offered.

The 6-month yield fell 5 basis points to 10.22 percent, with 25 billion rupees of bills offered and 29.98 billion rupees sold.

The 12-month yield dropped 4 basis points to 10.23 percent with 18.01 billion rupees of bills sold after offering 23 billion rupees. (Colombo/Apr17/2024)

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