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Thursday June 8th, 2023

Sri Lanka’s protestors told to obtain police permission six hours ahead

ECONOMYNEXT – Police permission must be obtained six hours ahead of any protest-marches and demonstrations, Sri Lanka’s Acting Minister of Defence said, defending a controversial return to war-time high security zones (HSZs) in the capital Colombo.

State Minister of Defence Premitha Bandara Tennakoon told reporters Monday September 26 morning that the security establishment will take legal measures to stop or prevent illegal demonstrations that inconvenience and obstruct everyday life and create a sense of chaos in the country.

He stressed, however, that the government accepts and respects the people’s right to protest.

“But no protest should cause obstruction to everyday life or to the economy,” he said.

On Saturday September 24, Sri Lanka police arrested 84 people including three monks and four women during an “illegal” protest in Colombo organised “without permission”, a day after President Ranil Wickremesinghe declared several HSZs.


Sri Lanka police arrest 84 for “illegal” protest after president’s high security zone declaration 

“As per the law of the country, prior approval must be obtained from the security establishment a few hours prior to a protest march or demonstration. None of the protests currently being held is in accordance to that law,” said Tennakoon.

“The police must be informed about any protest six hours ahead and if permission is obtained, there will be no issues,” he said.

The state minister was speaking at a press conference held at the government information department with the participation of Defence Ministry Secretary Gen Kamal Gunaratne and police spokesman SSP Nihal Thalduwa.

The government came under harsh criticism from some opposition lawmakers and activists for what they claimed is the most recent episode in a heavy-handed crackdown on anti-government protests.

Youth-led protests against the government of ex-President Gotabaya Rajapaksa that erupted islandwide from March onward, amid Sri Lanka’s worst currency crisis in decades, saw thousands of ordinary citizens take to the streets demanding Rajapaksa’s resignation. Following his exit in July and the appointment of Wickremesinghe as his successor, the authorities have followed a tougher line on anti-government protests, though analysts say there was an organic and gradual decline in the public’s appetite for protests after July 09.

Government ministers and others claim that some opposition parties, particularly those on the left, have hijacked the people’s protest since at least May and that Saturday’s protests – held demanding the release of some protest leaders affiliated with those parties who are currently detained – was a politically motivated attempt at disrupting Sri Lanka’s recovery efforts.

The organisers vehemently deny the allegations and claim that the Wickremesinghe government is attempting to violently suppress dissent. The use of provisions in the controversial Prevention of Terrorism Act (PTA) has also drawn much criticism. The latest series of arrests has also been met with condemnation. Amnesty International South Asia said the Sri Lankan authorities have “reaffirmed its intolerance towards dissent”.

Tennakoon said no party or group can be allowed to act irresponsibly and break any law that exists to maintain the peace.

“The government acts with great responsibility in this regard,” he said.

Otherwise, he said, a “frightful anarchic” situation will be inevitable with a return to violence. He was ostensibly referring to incidents of May 09 that saw a wave of retaliatory mob violence around the country after supporters of the then Prime Minister Mahinda Rajapaksa launched an unprovoked attack on peaceful anti-government protestors. Houses and offices belonging to various government MPs were burnt and several people were killed in the aftermath, including one MP.

“We cannot allow such a situation to recur in this country. As State Minister of Defence, I reiterate that the government will take legal measures to stop all illegal attempts by those groups to meet their objectives,” said Tennakoon.

“The president imposed High Security Zones to ensure national security. [It is what] the people expect from a responsible government. Anyone can function as usual in those areas. It will only be a problem to those who engage in illegal acts,” he said. (Colombo/Sep26/2022)

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  1. emilyjoack says:

    Is sri-lanka a military government ?

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  1. emilyjoack says:

    Is sri-lanka a military government ?

Sri Lanka’s shares slip on profit taking and selling pressure

ECONOMYNEXT – Sri Lanka’s shares closed lower on Wednesday after four consecutive gains in previous sessions spiraled into selling interest and profit taking, an analyst said.

The main All Share Price Index was down 0.28 percent or 24.39 points to 8,722.06, this is the lowest the index has been since May 02, while the most liquid index S&P SL20 was down 0.40 percent or 9.92 points to 2,468.44.

“The market was gaining in the previous sessions and there is selling and profit taking present today, due to continuously being on green,” an analyst said.

In the previous sessions the market was seeing gains, due to lowered policy rates and low inflation stimulating buying interest and driving the sentiment up, an analyst said.

Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier according to a revised Colombo Consumer Price Index calculated by the state statistics office.

The central bank cut the key policy rates by 250 basis points to spur a faltering economic growth as inflation was decelerating faster than it projected.

“There are gradual improvements in the market sentiment, with positive sentiments coming in from lowered policy rates and inflation,” an analyst said.

The market generated foreign inflows of 12 million rupees and received a net foreign inflow of 18 million rupees, due to low share prices and discounted shares followed by a dividend announcement.

The market generated a revenue of 554 million rupees, this is the lowest the turnover has been since May 10, while the daily turnover average was 1 billion rupees. From the total generated revenue, the banking sector contributed 120 million rupees, Diversified Banks contributed 115 million rupees and the Capital Goods Industry generated 78 million rupees.

Top losers during trade were Sampath Bank, Commercial Bank and Aitken Spence. (Colombo/June06/2023)

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Sri Lanka Treasuries yields plunge, 12-month down 318bp

ECONOMYNEXT – Sri Lanka’s Treasuries yields plunged across maturities at Wednesday’s auction with the 12-month yield falling 318 basis points, in one of the biggest one day falls, data from the state debt office showed.

The 3-month yield fell 244 basis points to 23.21 percent.

The 6-mont yield fell 339 basis points to 21.90 percent, along with the 12 months to 19.10 percent.

The short-term yield curve is inverted.

The central bank last week cut its policy rate 250 basis points in a signaling move but is not printing money to enforce the rate cut.

The debt office sold all 140 billion rupees of offered securities. (Colombo/June07/2023)

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Sri Lanka forex reserves rise US$722mn in May 2023

ECONOMYNEXT – Sri Lanka’s foreign reserves grew 722 million US dollars to 3,483 million US dollars in May 2023 from 2,761 million US dollars in April, official data showed as deflationary policy and weak credit reduced ‘above the line’ outflows.

Sri Lanka lost almost all its reserve in over two years as the central bank sold reserves and printed money to keep rates down (sterilized reserves sales) including borrowed dollars from India.

Gross official reserves fell to a low of 1,705 million US dollars in September 2022.

Sri Lanka’s central bank hiked rates in April 2022 to slow credit and also stopped printing money after it ran out of borrowed Asian Clearing Union dollars from India.

Sri Lanka’s gross official reserves are made up of both monetary reserves of the central bank and any balances of the Treasury account from loans or grants it gets.

The central bank’s net foreign reserves are still negative after busting up borrowed reserves to suppress rates. By April (before the collection of reserves in May) the central bank’s net reserves were negative by 3.7 billion US dollars.

In May alone 662 million US dollars were bought from the market, Central Bank Governor Nandalal Weerasinghe said.


No pre-determined level to stop Sri Lanka rupee appreciation: CB Governor

Borrowing dollars through swaps and busting them up, was invented by the US Federal Reserve as it was printing money and breaking the Bretton Woods system in the early 1970s.

Sri Lanka received a 350 million US dollar tranche from the Asian Development Bank and 331 million US dollars from the IMF to the Treasury for budget support.

The loans can be sold to the central bank by the government to generate rupees and spend. However, since credit is weak, not all the inflows go out of the country particularly as the central bank is conducting deflationary open market operations on a net basis.

By allowing the rupee to appreciate unlike in previous episodes of recovery in an IMF program, after a bout of money printing, the central bank is bringing down inflation – in some cases absolute prices – and restoring confidence and easing the ‘pain’ of ‘monetary policy’ or stimulus.


Why is Sri Lanka’s rupee appreciating?

Though exports are falling, tourism revenues are also picking up.

The budget support loans, tourism receipts less the reserve collected will widen the trade deficit. Building foreign reserves involves lending money to the US or other western nations and is similar to repaying foreign debt. (Colombo/June07/2023)

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