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Tuesday May 21st, 2024

Sri Lanka vehicle registrations hits 6-year low amid elections, peg collapse

ECONOMYNEXT – Sri Lanka’s vehicle registrations fell to 24,472 units in November 2019, the lowest since the June 2013 amid a collapsed of a ‘flexible exchange rate’ and election in November, an analysis of vehicle registry data compiled by JB Securities, a Colombo-based equities brokerage.

In June 2013, vehicle registrations fell to 24,415, down from 47,500 in January 2012 after rates were hiked and currency was floated after a rate cut and several months of liquidity injections triggered a balance of payments crisis.

In 2019 Sri Lanka is againt going through a credit slowdown and stagflation after a collapse of the island’s highly unstable soft-peg labeled a ‘flexible exchange rate’.

The peg has downward only disorderly market conditions (DMC) rule under an International Monetary Fund program but no sterilization restriction leading to little or no-credibility, analysts have aid.

The flexible exchange rate collapsed to 182 from 153 to the US dollar in 2018 amid high levels of excess liquidity injected to target a call money rate.

Restrictions were then slapped on vehicle imports. In 2019 a further blow to sentiment was delivered from suicide bombings by Islamist extremists in April.

However some restrictions on vehicle imports have been relaxed. Unlike other imports, vehicles provide large volumes of tax revenues due to high rates of taxation.

Motor car registrations fell to 2,030 units in November from 2,512 in October and 7.226 units in May 2018. In eh currency cycle liquidity injections began in March 2018, just as the economy was recovering from a 2015/2016 collapse of the peg to 153 to the US dollar from 131 to the dollar.

Motor cycle registrations fell to 18,540 units in November from 21,918 units in October and 22,273 units in November.

In March 2018, as money printing began 30,381 units were registered just as the recovery was starting.

In November 638 crossovers and sports utility vehicles were registered down from 738 in October, 101 pick-ups down from 149, 158 light trucks down from 217 and 55 heavy trucks down from 101.

Registration of buses fell to 152 from 206 a month earlier. (Colombo/Dec25/2019)

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Sri Lanka declares May 21 as National Mourning day over Iranian President’s death

ECONOMYNEXT – Sri Lanka declared a national mourning day on Tuesday, May 21 in view of expressing its solidarity with Iran after sudden death of Iran President Ebrahim Raisi following a helicopter crash.

President Raisi and eight others including Iranian Foreign Minister Hossein Amir Abdollahian were killed in the crash when the helicopter had a “hard landing” reportedly due to adverse weather conditions with heavy fog. However, President’s two convoy helicopters reached the destination safely.

“The Sri Lankan government has declared a national mourning day on tomorrow (May 21) on behalf of the sudden death of Iranian president Mr. Ebrahim Raisi,” the Department of Government Information said in a statement.

It also urged all the state institutions have to hoist the national flag half mast.

Raisi was in Sri Lanka on April 24 to launch the Uma Oya dam on a one-day official visit amid tight security. His helicopter crashed when he was returning to Iran after launching a dam in the Azerbaijan border.

President Raisi is seen as a hardliner and a potential successor to Supreme Leader Ayatollah Ali Khamenei.

Earlier this month, Sri Lanka’s Foreign Minister Ali Sabry said the island nation will deal with Iran for investments and trade without being caught into the United States-led sanctions.

Sri Lanka was unable to receive $450 million from Iran for a recently opened Uma Oya multipurpose project started before the sanctions.

Sri Lanka now exports tea to Iran for no dollar payment. Instead, Sri Lanka tea producers are paid by the state-owned Ceylon Petroleum Corporation (CPC) in rupees for the pending crude oil import payments for Iran.

President Ranil Wickremesinghe expressed his condolences on the tragic incident.

“Sri Lanka is deeply shocked and saddened by the tragic death of President Ebrahim Raisi, Foreign Minister Amir Abdollahian and other senior Irani official,” he said in his official X-platform.

“I express my deepest sympathies and sincere condolences to the bereaved families, the government and the people of Iran.”

Raisi, a Muslim jurist, served as the eighth president of Iran from 2021 until his death. (Colombo/May 20/2024)

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Sri Lanka helps launch Global Blended Finance Alliance

ECONOMYNEXT – Sri Lanka has joined a group of nations led by Indonesia which aims to mobilise capital to achieve carbon neutrality, Minister of Water Supply and Estate Infrastructure Jeevan Thondaman said.

The Global Blended Finance Alliance mooted by Indonesia in 2018, was formally launched at the World Water Forum in Bali today.

Among the other founding members are Fiji, France, UAE, Kenya, Luxembourg and Canada.

“Through our collective efforts, the Global Blended Finance Alliance aims to mobilise both public and private capital to help nations achieve carbon neutrality and the SDGs,” Thondaman said on social media platform X (twitter).

“The world has a USD 2.5 trillion funding gap to achieve the Sustainable Development Goals (SDGs) by 2030,” he said.

Blended finance is the strategic use of development finance, such as public and/or philanthropic funds, for the mobilisation of additional commercial finance towards sustainable development in developing countries. (Colombo/May20/2024)

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Sri Lanka rupee closes slightly stronger at 299.60/75 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee appreciated slightly to close at 299.60/75 to the US dollar on Friday, from 299.70/80 the previous week, dealers said. Bond yields were up.

A bond maturing on 15.12.2026 closed up at 10.15/35 percent from 10.05/15 percent.

A bond maturing on 15.09.2027 closed up at 10.45/55 percent from 10.25/40 percent.

A bond maturing on 01.07.2028 closed at 10.80/90 percent.

A bond maturing on 15.01.2030 closed at 11.70/80 percent.

A bond maturing on 01.10.2032 closed up at 11.90/12.05 percent from 11.85/12.00 percent. (Colombo/May20/2024)

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