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Monday September 25th, 2023

Sri Lanka’s worst economic crisis in known history just beginning: Parliament Speaker

ECONOMYNEXT – Sri Lanka is facing the worst economic crisis in know history but it is just the beginning, parliamentary speaker Mahinda Yapa Abeywardena said commencing a debate on current status of the nation.

“I would like to say that this is the beginning of the worst economic crisis in the known history of our country,” speaker Abeywardene said.

“I am saying this is the start because, as I understand it many economists are warning that it can become much worse.

“In addition to the gas and fuel shortage there are fears that a severe food crisis may emerge.

“Whether it happens like that or we can avert it to some extent will depend on how we act in the next week.”

Sri Lanka’s printed money for two years using an intermediate regime central bank which has triggered the worst forex crisis in its since it was set up in 1950.

Sri Lanka’s economists had used the central bank to print money, create currency crisis pursuing a ‘competitive exchange rate’ monetary debasement for 72 years busting the rupee from 4.77 to the rupee when it was set up to over 300 to the US dollar by 2022.

Economists in the country have so far resisted calls to tighten its laws so that open market operations are curtail so that forex shortages can external default.

However analysts say at time legislators can revamp the law to end the discretionary ‘flexible exchange rate’ or soft-peg and end currency crises.

The monetary meltdown and external default long predicted by analysts and economists as ‘stimulus’ policy became more activist has now turned into a political crisis. (Colombo/Apr06/2022)

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Sri Lanka sells 2028 bonds at 14.52-pct

ECONOMYNEXT – Sri Lanka sold all offered bonds in 2026 and 2028 maturities raising 220 billion rupees from an auction Monday, data from the state debt office showed.

The debt office sold 135 billion rupees of 1 June 2026 bonds to yield 15.64 percent.

Another 85 billion rupees in 01 July 2028 bonds were sold to yield 14.52 percent.

The 2028 bond is offered on tap at the weighted average yield. (Colombo/Sept25/2023)

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Sri Lanka’s stocks end down on Monday after slow day of trading

ECONOMYNEXT – Sri Lanka shares were down at close of trading on Monday.

Turnover was 550 million rupees.

The main All Share Price Index was down 0.36 percent or 40.02 points to 11,216.50, while the S&P SL20 was down 0.44 percent or 14.07 points to 3,164.52.

Trading in the Capital Goods Industry (174,037,134) drove turnover.

Commercial Bank, Expolanka Holdings, and Aitken Spence plc saw losses, while National Development Bank, John Keells Holdings and Melstacorp saw gains in the day’s trading.

The market saw a net foreign inflow of 13 million rupees, while the yearly net foreign inflow was 429 million rupees. (Colombo/Sep25/2023)

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Sri Lanka rupee closes at 324.75/324.90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 324.75/90 to the US dollar on Monday, from Friday’s close at 324.70/325.00 dealers said.

Bond yields were up.

A bond maturing on 01.07.2025 closed up at 15.55/15.70 percent on Monday, after closing at 14.95/15.30 percent on Friday.

A bond maturing on 01.08.2026 closed up at 15.50/15.65 percent up from 14.95/15.10 percent.

A bond maturing on 15.09.2027 closed up at 14.75/15.50 percent from 14.55/15.00 percent.

A bond maturing on 01.05.2028 closed up at 14.25/14.60 from 14.00/14.30 percent.

A bond maturing on 15.05.2030 closed stable at 13.00/13.50.

A bond maturing on 01.07.2032 closed at 12.95/13.45 percent from 13.00/13.45 percent. (Colombo/Sept25/2023)

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