An Echelon Media Company
Sunday March 26th, 2023

SriLankan Airlines security chief denies knowledge of staff released for election work

ECONOMYNEXT – Security officers of SriLankan Airlines given ‘duty leave’ around the time of the last presidential election were not released for political work, the current acting head of security of state-run SriLankan Airlines, told a commission of inquiry.

The Presidential Commission is probing alleged irregularities at the airline from 2006 to January 2018.

Titus Kannangara, acting head of security at SriLankan Airlines said no vehicles or staff of the security department were used for election campaigning.

"According to you, were personnel and vehicles in the security department used for political work?" Deputy Solicitor General Shanaka Wijesinghe questioned.

"No, not for political work," Kannangara said.

He said that he had received a request from the human resources department to provide duty leave for seven individuals, and he had approved, since this was routine procedure.

He was presented with an email written by then Sri Lanka Nidahas Sevaka Sangamaya (SLNSS) General Secretary Janaka Wijayapathiratne to the airline’s human resource department, requesting the release of seven union members in the security department for campaigning in the Pelmadulla area in December 2014.

Kannangara was asked which candidate’s election campaign the letter referred to. He refused to name ex-President Mahinda Rajapaksa.

“I can’t say the name. It was the person in power,” he said.

Evidence was also presented from the log book at the guard room which had recorded the leave of one of the individuals. It had said that one B. Sunil was given duty leave to engage in campaign work as requested by Kannangara.

"The reason written here is erroneous. It was written by a different person," Kannangara said.

Security Officer Hasantha Yasaratne, who is also General Secretary of the airline’s SLNSS trade union, testified a week earlier that security department officials who were union members and airline vehicles were used for ex-President Mahindra Rajapaksa’s campaign in Kolonnawa.

He said it was authorized by then Group Head of Security P. Chandrawansa, an ex-military official.

Yasaratne told the commission according to company guidelines, staff is not allowed to engage in political work.

Kannangara is also a former military officer, having served in the army and the volunteer naval force. (COLOMBO, 1 August, 2018)


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Sri Lanka seeks to settle India ACU debt, credit lines over 5-years

ECONOMYNEXT – Sri Lanka has requested India to settle payments due to the country under the Asian Clearing Union mechanism and credit lines given in 2022 over 5 years, Indrajit Coomaraswamy, an advisor the island’s government said.

Sri Lanka is negotiating with India to settle the money over a 5-year period, Coomaraswamy, a former central bank governor told an online forum hosted by the Central Bank.

“Our request from the Indians is to settle it over five years,” he said. “That I think is still in the early stages of negotiation. The same with the one billion line of credit.”

Sri Lanka’s central bank owed the ACU 2.0 billion US dollars to the Asian Clearing Union according to a year end debt statement, issued by the Finance Ministry.

Sri Lanka owned India, 1,621 million dollars according to ACU data by year end, excluding interest.

India has given a 1 billion US dollar credit line to Sri Lanka as well a credit line for petroleum.

Sri Lanka in March 2024 has paid 121 million US dollar out of a 331 million US dollar IMF tranche to settle an Indian credit line.

Indian credits were given after the country defaulted in April 2022 as budget support/import when most other bilateral lenders halted giving money. (Colombo/Mar26/2023)

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Sri Lanka coconut auction prices up 1.16-pct

ECONOMYNEXT- Sri Lanka’s coconut auction prices went up by 1.16 percent from a week ago at an auction on Thursday, data showed.

The average price for 1,000 nuts grew to 83,219.45 from 82,260.58 a week earlier at the weekly auction conducted by Sri Lanka’s Coconut Development Authority on March 23.

The highest price was 92,500 rupees for 1,000 nuts up from the previous week’s 90,600 rupees, while the lowest was 76,500 also up from 70,000 rupees.

The auction offered 900,010 coconuts and 583,291 nuts were sold. (Colombo/Mar 26/2023)

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Sri Lanka in talks for billion dollar equivalent Indian rupee swap

ECONOMYNEXT – Sri Lanka is in talks with India for a billion US dollar equivalent Indian rupee central bank swap, to facilitate trade, Indrajit Coomaraswamy, ad advisor to the government said.

“The amount is still uncertain it could be up to the equivalent of a billion US dollars,” Coomaraswamy told an online forum hosted by Sri Lanka’s central bank.

The money will be used to facilate India Sri Lanka trade, he said.

India has been trying to popularize the use of Indian rupees for external trade and also encouraged Sri Lanka banks to set up Indian rupee VOSTRO accounts.

However the first step in popularizing a currency for external trade is to get domestic agents, especially exporters, to accept their own currency for trade, like in the case of the US or EU, analysts say.

India’s billion US dollar credit to Sri Lanka given during the 2022 crisis is settled in Indian rupees (transaction need).

However the Indian government itself has chosen to denominate it in US currency for debt purposes (future value).

In most South Asian nations, receivers of remittances are willing to accept domestic currencies, leading to active VOSTRO account transactions.

Sri Lanka is expected to repay a 400 million US dollar swap with the Reserve Bank of India next year under an International Monetary Fund backed program for external stability and debt re-structuring.

Central bank swap proceeds sold to banks, which are then sterilized with inflationary open market operations, can trigger forex shortages and currency crises, analysts warn.

Sri Lanka went to the International Monetary Fund after two years of inflationary monetary operations by the central bank’s issue department (money printed to suppress interest rates) triggered the biggest currency crisis in its history and external sovereign default.

Sri Lanka had gone to the IMF 16 times with similar external troubles except for the April 2003 extended fund facility under Central Bank Governor A S Jayewardene which was a purely reform-oriented program with the World Bank (PRGF/PRSP) program at a time when he was collecting reserves with deflationary monetary policy and perhaps the lowest inflation since the Bretton Woods collapsed. (Colombo/Mar26/2023)

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