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Sunday December 3rd, 2023

Sri Lanka’s new Central Bank Act challenges govt money printing, spending – minister

ECONOMYNEXT – Sri Lanka’s new Central Bank Act is a challenge for the government, State Finance Minister Ranjith Siyambalapitiya said, as the state has been used for spending more than its revenue through money printing.

Successive Sri Lankan governments failed to curb money printing due to their failure in reducing the spending in line with revenue amid a narrow tax net.

But the island nation is unable to print money by law, according to the new Central Bank Act which came into effect on September 15.

“We can only print money during a global pandemic,” State Finance Minister told Reporters in Colombo at a media briefing when asked about the impact of the new Central Bank Act.

“Even that, we can only go up to the 5 percent of the parliament approved level from treasury bills. It’s a challenge. It’s a new thing.”

The new Act came as President Ranil Wickremesinghe government’s commitment to the International Monetary Fund in return to a $3 billion loan programme to come out of an unprecedented economic crisis.

Sri Lanka declared bankruptcy and defaulted its sovereign debts in April last year after the central bank ran out of foreign currency to repay foreign loans.

Since the IMF programme was approved in June, the government has been in the process of both domestic and external debt restructuring.

The government has also raised taxes despite protests by trade unions and some politically motivated demonstrations.

Siyambalapitiya said the government should be able to manage the new challenge with the raised taxes and rationalized spending.

“We have already raised the revenue by 50 percent this year. We need to go further,” the Minister said.

“I hope we can face this challenge with the government’s expenditure management. The government’s financial discipline is essential.” (Colombo/September 23/2023)

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Sri Lanka UGC wants to boost number of IT-related degrees

ECONOMYNEXT – Sri Lanka’s University Grants Commission is of the view to boost the number of Information Technology (IT) related degrees in state universities with an aim to pave the way for a digital economy.

Sri Lanka’shigher education system has been producing more graduates in Arts stream while the degrees in highly demanded IT and other engineering services are being looked at only now.

“We do have a high demand for engineering, science, AI, computer and electronical engineering

studies,” Chairman of University Grants Commission, Sampath Amaratunga, told reporters at aa media briefing on Friday

“However, while avoiding neglecting the humanities, we should develop new IT skills.”

Amaratunga confirmed that a student who studied in any stream could obtain an IT degree, including students who studied in the arts stream.

The UGC data show that out of 18,490 engineering technology stream students who sat for their Advanced Levels (A/L) in 2022, 10634 were eligible for university.

“Even streams like agriculture should be encouraged to use technology,” Amaratunga said. (Colombo/Dec 2/2023)

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Sri Lanka leader inaugurates Climate Justice Forum at COP28 in Dubai

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe launched Climate Justice Forum (CJF) at the ongoing 2023 United Nations Climate Change Conference (COP28) held in Dubai in a move to gather support for vulnerable nations hit by climate-change led disasters.

This year’s climate summit held in Dubai’s EXPO2020 features a raft of issues for countries working to find common ground in tackling climate change, including whether to phase out fossil fuels and how to finance the energy transition in developing countries.

Wickremesinghe inaugurated the Climate Justice Forum at COP28 on Saturday and emphasized the critical importance of addressing climate issues with a sense of justice and equity.

The President had been in talks with many nations vulnerable to climate change disasters including African and South American countries to get their support for the CJF.

The move is to compel advanced and developed countries to look into the poor nations hit by the climate changes and help them to get over economic and debt burdens by either investing more in green energy initiatives or writing off debts to ease financial pressure.

Sri Lanka, which is now facing an unprecedented economic crisis, has seen increasing losses and damages, both human lives and physical properties due to climate change-led disasters like floods, drought, and earth slips.

In his speech at the COP28 forum, Wickremesinghe on Friday said the Climate Justice Forum will provide a platform for constructive and proactive engagements. (Dubai/Dec 2/2023)

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Sri Lanka IMF review goes to executive board on December 12

ECONOMYNEXT – The first review of Sri Lanka’s International Monetary Fund program is scheduled to go the lender’s Executive Board for consideration on December 12.

Sri Lanka officials were expecting the review to be completed in December as soon as official creditors gave their assurances.

According to the notice Sri Lanka had missed one performance criterion and has requested modifications.

Sri Lanka has outperformed on a number of quantity targets including inflation. In addition to quantity PCs there was also one non-accumulation of arrears.

There would also be re-phasing of access. The review was originally expected around September with another review based on December data, leading to September and March disbursements.

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