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Wednesday June 7th, 2023

Sri Lanka’s SOS Village youth have high employability

LIFE SKILLS: Students going through computer applications assistant course

ECONOMYNEXT – Children who grow up and leave the care of SOS Children’s Villages have high employability, with the charity giving them skills and vocational qualifications needed in the real world, officials said.

“The employment rate of the ‘care leavers’ are as high as 98 percent,” the Deputy Chief Operating Officer of SOS Children’s Villages International, Shubha Murthi said.

“We make sure that a child has at least one employable skill when he or she leaves SOS Children’s Village.”

SOS Children’s Villages is a charity focused children who have lost or are in the verge of losing parental care. The charity operates in 136 countries.

“Apart from the vocational training we provide them financial management, home management, fire fighting and other training, which makes them marketable in workforce,” says National Director, Divakar Ratnadurai.

SOS Village runs free National Vocational Qualifications level courses in Sri Lanka to youth in vulnerable communities.

In Sri Lanka, the charity has 873 children at centres in Piliyandala, Galle, Anuradhapura, Monoragala, Nuwara Eliya and Jaffna. It supports 3,650 children in several ways.

Simrin Singh, country director of the International Labour Organization for Sri Lanka and the Maldives says kids there is a tendency in many countries for well in life compared to others who have had 13 years of education.

“Because, sadly they have had many a lot of experiences growing up so they are more prepared to the work environment with their creative and innovative skills and they tend to perform lot better in teams,” Singh said.

“All of these skills is what employers want.”

Each year 20 plus children enter the SOS system. As many as 60-70 children may join the workforce.

This year 15 children have qualified for university, an official said.

“Every child has a development plan from the age of 11-years in which we monitor the potential of them and create them a path accordingly,” Programmes Director, Dhananjaya Perera said.

“We have psychological and psychosocial programmes for them children to cope with the social environment.”

According to SOS Children’s Village, all the youth get a salary of over 30,000 rupees.

In Sri Lanka youth unemployment is 21.4 percent, according to census department data.

It is highest among A/L and above group 9.1 percent and O/L is 5.2 percent, Grade 10 and those below is 2.4 percent.

The total unemployment rate in Sri Lanka is 4.4 percent.

In Sri Lanka graduates from state universities hold hunger strikes in front of the main railway station demanding that part of the tax collection of the people be given to them as salaries and pensions, through non-existent jobs in the already bloated state sector.

The unemployed graduates have also been given the degree at the expense of tax payer, and are perfectly healthy. (Colombo/Sep14/2019)


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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 amid weak credit and better inflows.

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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