An Echelon Media Company
Sunday March 26th, 2023

Sri Lanka to give free on arrival tourist visa to 45 countries

ECONOMYNEXT- Sri Lanka’s cabinet has approved to grant free on-arrival visa for touristss, and have expanded the program from 39 countries to 45 in an attempt to recover faster from the Easter Sunday attack, a statement said.

The cabinet had earlier given approval to start the free on-arrival visa on May 01, but the program was halted due to security concerns after the Easter Sunday attack.

The state information office said that new countries have been added to the list in a new cabinet memorandum presented by Tourism Development Minister John Amaratunga.

Amaratunga had told the media earlier in July that the program would start on August 01.

Sri Lanka’s tourist arrivals have been recovering faster than the state and travel industry had initially expected.

Globally, countries have taken on average around 13 months to recover from a terror attack.

Sri Lanka’s tourist arrivals, which had immediately fallen 71 percent in May from a year earlier, had recovered to a 38 percent fall in the third week of July compared to the average last year, according to Sri Lanka Tourism Promotions Bureau Chairman Kishu Gomes.

Gomes is expecting arrivals to fully recover in three to four months.

The government is planning to launch a 1 billion rupee public relations and promotions campaign, and has also taken steps to reduce taxes and fees at the airport to allow reduction of air fares to Sri Lanka.

The full list of countries being given free visa on arrival is as follows:

1. Australia
2. Austria
3. Belgium
4. Bulgaria
5. Cambodia

6. Canada

7. China
8. Croatia
9. Cyprus
10. Czech Republic
11. Denmark
12. Estonia
13. Finland
14. France
15. Germany
16. Greece
17. Hungary

18. Iceland

19. India
20. Ireland
21. Italy

22. Japan
23. Latvia
24. Lithuania
25. Luxembourg
26. Malta

27. Malaysia
28. Netherlands

29. Norway

30. New Zealand

31. Philippines
32. Poland
33. Portugal

34. Romania

35. Russia

36. Singapore
37. Slovak Republic
38. Slovenia

39. South Korea
40. Spain
41. Sweden

42. Switzerland

43. Thailand
44. United Kingdom
45. United States of America (Colombo/Jul24/2019)

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Sri Lanka seeks to settle India ACU debt, credit lines over 5-years

ECONOMYNEXT – Sri Lanka has requested India to settle payments due to the country under the Asian Clearing Union mechanism and credit lines given in 2022 over 5 years, Indrajit Coomaraswamy, an advisor the island’s government said.

Sri Lanka is negotiating with India to settle the money over a 5-year period, Coomaraswamy, a former central bank governor told an online forum hosted by the Central Bank.

“Our request from the Indians is to settle it over five years,” he said. “That I think is still in the early stages of negotiation. The same with the one billion line of credit.”

Sri Lanka’s central bank owed the ACU 2.0 billion US dollars to the Asian Clearing Union according to a year end debt statement, issued by the Finance Ministry.

Sri Lanka owned India, 1,621 million dollars according to ACU data by year end, excluding interest.

India has given a 1 billion US dollar credit line to Sri Lanka as well a credit line for petroleum.

Sri Lanka in March 2024 has paid 121 million US dollar out of a 331 million US dollar IMF tranche to settle an Indian credit line.

Indian credits were given after the country defaulted in April 2022 as budget support/import when most other bilateral lenders halted giving money. (Colombo/Mar26/2023)

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Sri Lanka coconut auction prices up 1.16-pct

ECONOMYNEXT- Sri Lanka’s coconut auction prices went up by 1.16 percent from a week ago at an auction on Thursday, data showed.

The average price for 1,000 nuts grew to 83,219.45 from 82,260.58 a week earlier at the weekly auction conducted by Sri Lanka’s Coconut Development Authority on March 23.

The highest price was 92,500 rupees for 1,000 nuts up from the previous week’s 90,600 rupees, while the lowest was 76,500 also up from 70,000 rupees.

The auction offered 900,010 coconuts and 583,291 nuts were sold. (Colombo/Mar 26/2023)

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Sri Lanka in talks for billion dollar equivalent Indian rupee swap

ECONOMYNEXT – Sri Lanka is in talks with India for a billion US dollar equivalent Indian rupee central bank swap, to facilitate trade, Indrajit Coomaraswamy, ad advisor to the government said.

“The amount is still uncertain it could be up to the equivalent of a billion US dollars,” Coomaraswamy told an online forum hosted by Sri Lanka’s central bank.

The money will be used to facilate India Sri Lanka trade, he said.

India has been trying to popularize the use of Indian rupees for external trade and also encouraged Sri Lanka banks to set up Indian rupee VOSTRO accounts.

However the first step in popularizing a currency for external trade is to get domestic agents, especially exporters, to accept their own currency for trade, like in the case of the US or EU, analysts say.

India’s billion US dollar credit to Sri Lanka given during the 2022 crisis is settled in Indian rupees (transaction need).

However the Indian government itself has chosen to denominate it in US currency for debt purposes (future value).

In most South Asian nations, receivers of remittances are willing to accept domestic currencies, leading to active VOSTRO account transactions.

Sri Lanka is expected to repay a 400 million US dollar swap with the Reserve Bank of India next year under an International Monetary Fund backed program for external stability and debt re-structuring.

Central bank swap proceeds sold to banks, which are then sterilized with inflationary open market operations, can trigger forex shortages and currency crises, analysts warn.

Sri Lanka went to the International Monetary Fund after two years of inflationary monetary operations by the central bank’s issue department (money printed to suppress interest rates) triggered the biggest currency crisis in its history and external sovereign default.

Sri Lanka had gone to the IMF 16 times with similar external troubles except for the April 2003 extended fund facility under Central Bank Governor A S Jayewardene which was a purely reform-oriented program with the World Bank (PRGF/PRSP) program at a time when he was collecting reserves with deflationary monetary policy and perhaps the lowest inflation since the Bretton Woods collapsed. (Colombo/Mar26/2023)

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