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Thursday August 18th, 2022

Sri Lanka’s President Sirisena sacks secretaries in final showdown

ECONOMYNEXT, Sri Lanka President Maithripala Sirisena sacked the two of his senior most party secretaries and suspended their membership in a further blow to Mahinda Rajapaksa’s prime ministerial hopes.

Sirisena ordered the sacking of UPFA General Secretary Susil Premajayantha and his SLFP counterpart Anura Priyadharshana Yapa and fired letters to the Elections Commissioner saying that they can no longer represent the party.

The move is seen as an attempt to stall either of them nominating Rajapaksa loyalists as members of parliament from the UPFA national list after Monday’s elections.

The replacements as general secretaries of the UPFA and SLFP, Prof. Wishwa Warnapala and Duminda Dissanayake, went to the Colombo district court today and secured a restraining order against their predecessors.

The judge, Harsha Sethunga fixed a hearing for August 28.

In another development, the sacked two secretaries have been given marching orders to clear their offices at the Sri Lanka Freedom Party headquarters where earlier in the day Rajapaksa suffered another setback.

Sirisena suggesting seven alternate names as potential prime ministerial candidates caused further rifts within the UPFA ranks hours before the end of campaigning.

Rajapaksa loyalists wanted to bring the seven men Sirisena nominated as potential PM material and get them to say that they did not want the job and instead to give it to Rajapaksa.

 The seven men are Nimal Siripala de Silva, John Seneviratne, Chamal Rajapaksa, Athadua Seneviratne, A. H. M. Fowzie, Susil Premajayantha and Anura Priyadarshana Yapa.

However, only three turned up and they are John Seneviratne, Athauda Seneviratne and Susil Premajayantha, a man who was to get the sack a few hours later.

John Seneviratne said he was speaking on behalf of all seven and declared that neither of them wanted the PM job and that it should go to Mahinda Rajapaksa should their party win.

Even before John Seneviratne could finish his sentence, Athauda Seneviratne withdrew from the press conference and beat a hasty retreat, clearly uncomfortable with John speaking for him.

The organisers had also arranged a letter signed by the seven men declaring their support to Rajapaksa to be the next prime minister should their party win, but there were only six names.

The name of Fowzie had been dropped. The letter was withdrawn and no fresh letter was issued as Fowzie told reporters that he refused to sign the letter as he agreed with Sirisena that he had prime ministerial potential.

Party insiders say that Fowzie had been one of those opposed to granting nominations to Rajapaksa to contest Monday’s elections.

Rajapaksa loyalists put on a brave front saying that Sirisena’s bombshell yesterday was actually a blessing in disguise because according to them the president had suggested that they could reach 113 seats needed to win.

However, the UPFA may have shot itself in the foot by firing a letter to the elections commissioner asking him to stop any publication, discussion on Sirisena’s letter which they say is detrimental to their campaign.
Indepndent political observers said that Sirisena’s action was not illegal, but could be considered immoral.

    "Sirisena is also behaving very much like an intoxicated Rajapaksa," a political observer said. "Two wrongs won’t make one right."

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Sri Lanka stocks end steady after CB held policy rates steady; turnover slumps to over 2-wk low

ECONOMYNEXT – Sri Lanka stocks closed steady on Thursday (18) with turnover slumping to more than two-week low after the central bank held the key policy rates steady, dealers said.

The main All Share Price Index (ASPI) edged up 0.04% or 3.22 points to 8,910.57. On Tuesday, it fell from its highest
close since March 30.

“We saw the market stabilizing after slipping for the last two days on profit taking,” a top analyst said.

“But overall there was continued buying interest on the energy sector and in addition, we saw buying coming into the plantation-related stocks and their holding companies.”

There had been selling pressure on the banking sector, he said.

At the monthly policy review meeting held today, the central banks kept the rates unchanged.

Market analysts said investors have been looking for profit taking after the index gained nearly 2,000 points in the 12 consecutive sessions through Monday.

Investors, however, have been shifting from top liquid shares to energy and plantation sectors now, analysts said.

The market generated 2.72 billion rupees in turnover, its lowest since August 3 and less than this year’s average daily turnover of 3.13 billion rupees. This is also the lowest turnover in last nine sessions.

Sri Lanka has already declared sovereign debt default on April 12 this year and failed to pay its first sovereign debt in May amid a deepening economic crisis which later turned into a political crisis and led to a change in the president, cabinet, and government.

The more liquid S&P SL20 index ended 0.52% or 15.33 points up at 2,962.33.

Sri Lanka is facing its worst fuel and economic crisis in its post-independence era and the economy is
expected to contract 7 percent this year.

The main ASPI gained 15.2 percent in August so far after gaining 5.3 percent in July. It lost 9.3 percent in
June, 23 percent in April, and 14.5 percent in March.

The market index has lost 27.1 percent so far this year after being one of the world’s best stock markets
with an 80 percent return last year when large volumes of money were printed.

Net foreign inflow was 83 million rupees on Thursday, but the total net foreign outflow so far this year is 1.09 billion rupees.

Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.

LOLC pushed the index up, closing 3.4 percent firmer at 589.3 rupees a share.

Sri Lanka Telecom closed 24.9 percent up at 42.2 rupees a share, and Dipped Products slipped 5.5
percent to 44.3 rupees. (Colombo/Aug17/2022)

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Sri Lanka rupee, yields in govt securities slightly changed

ECONOMYNEXT – Sri Lanka Central Bank’s guidance peg for interbank transactions weakened on Thursday (18) and yields in Treasury bonds picked up slightly while in T-bill edged down in dull trade after the central bank kept key monetary policy rates steady, dealers said.

On Thursday, before the market opened, the central bank held its key policy rates steady at 15.50 percent, while data showed market interest rates are close to twice the rate of them while private credit and imports falling as a consequence.

The central bank is injecting 740 billion rupees of overnight money to banks at 15.50 percent, which were originally injected mostly after reserves were sold for imports (or debt repayments) to artificially keep down rates (sterilized interventions), effectively engaging in monetary financing of imports.

The injections (sterilizing outflows) prevent the credit system from adjusting to the outflows and encourage unsustainable credit without deposits, which is the core problem with soft-pegged central banks, triggering a high rate and an economic slowdown later.

A bond maturing on 01. 06. 2025 closed at 27.90/28.00 percent, slightly up from 27.75/90 percent on Wednesday.

The three-months bill closed at 28.30/29.25 percent, down from 29.25/30 percent on Wednesday.

Sri Lanka’s central bank announced a guidance peg for interbank transactions weakened by one cent to 360.97 rupees against the US dollar on Thursday from 360.96 rupees.

Data showed that commercial banks offered dollars for telegraphic transfers between 367.97 and 370.00 for small transactions.  (Colombo/ Aug 18/2022)

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Japan grants medical equipment worth 500-mn yen to Sri Lanka govt hospital

ECONOMYNEXT –  The  Japanese government has granted medical equipment worth 500 million Japanese yen to the Sri Jayawardenepura government hospital to improve the hospital’s treatment facilities under Japan’s Non-Project Grant Aid Programme.

A statement by the Department of External Resources said the grant was given in response to a request by Sri Lanka’s government.

Under the 500 million Japanese yen (approximately 1,265 million rupees) grant assistance, angio-CT machine, other radiology equipment, ophthalmic instruments, surgical instrument sets (stainless steel with satin finish), 15 dental units with accessories, liver transplant instrument sets, and a cardiac catheterization laboratory will be provided, a statement said on Thursday August 18.

Sri Lanka due to its worst economic crisis in its post-independence history is currently facing shortages of essential medicine, non-essential and lifesaving medicines pressuring the health sector to only attend to emergency cases to preserve available limited medicine stocks.

On Thursday at the policy rate announcement media briefing by the Central Bank of Sri Lanka (CBSL), Governor Nandalal Weerasinghe said, with the strict measures taken in the recent past, Sri Lanka is currently managing the limited forex income coming into the country to purchase essential goods such as fuel and medicine.

Sri Lanka has received various grants from several countries including China and India which gave a 200 million US dollar credit line to purchase medicine from India.

In June, Minister of Health Keheliya Rambukwella said there is no shortage of vital medicines in the country and all medicines will be restocked by August 2022. However, shortages of medicine aer still being reported in various hospitals islandwide.

“This improvement at the hospital will facilitate the enhancement of the quality of the care provided especially to the patients with non-communicable diseases while enabling high quality medical professional training to medical undergraduates and postgraduates from the National School of Nursing at the aculty of Medical Sciences of the University of Sri Jayawardenepura,” the External Resources Department statement said.

“This project will eventually assist the development of human resources of the health sector in Sri Lanka,” it said. (Colombo/Aug18/2022)

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