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Thursday June 8th, 2023

Sudden rise in COVID-19 cases in Sri Lanka; children, pregnant among infected

ECONOMYNEXT – More children and pregnant women in Sri Lanka have tested positive for COVID-19 in recent days, health officials said on Thursday (20), noting a sudden spike in cases overall and urging the public to minimise travel and avoid gatherings.

Senior consultant in obstetrics and gynaecology at the Castle Street maternity hospital Dr Sanath Lanerolle said COVID-19 cases among pregnant women have increased.

Lanerolle attributed the spike in cases to increased travelling and public gatherings in December.

“Follow guidelines as usual. There will be long weekends. Stop going to public places and reduce travelling,” he told reporters on Thursday .

Meanwhile, Director of Lady Ridgway Children’s Hospital Dr G Wijesuriya said the number of children with the virus has also increased in the past week.

“Earlier there only few children getting treatment at the hospital but it has now increased to around 35,” Wijesuriya told reporters.

Meanwhile Deputy Director General of Health Services Dr Hemantha Herath said health officials are now investigating a possible increase in cases among children islandwide.

“We know interaction among children increases with the schools being open. With that there is a possibility of cases increasing.

“Keeping the schools open is very important for the children. We must work to keep the schools open and control the situation. The Ministry of Health as well as the Ministry of Education have taken the necessary steps to contain it,” he said.

Sri Lanka detected 829 new infections on Wednesday (19), a notable increase in daily cases.

Herath said, as expected with increased travels and gatherings in December, and the previous long weekend, a spike in cases can be seen.

However, he said, the rate of infection is slower than expected as a majority of the country have followed health guidelines when travelling.

“But we must be careful because a minority who do not follow guidelines can make the situation worse.”

So far, 15,000 beds have been dedicated to treat COVID-19 patients, of which around 30 percent are currently in use, officials said.

With the 829 new patients, total cases in Sri Lanka has reached 598,536 with 14,656 currently receiving treatment in hospitals or at home.

With 13 deaths confirmed on Wednesday, the COVID-19 death toll has increased to 15,243.

Out of 70 ICU beds, 52 beds are in use and the number of patients who need oxygen has increased by five percent as well.

“One thing we have to understand is Omicron is highly transmittable, more than other variants” Ministry of Health, Medical Technical Services Director, Anwar Hamdani told reporters earlier this week.

“We are informing the general public from the ground level to national level about how to protect themselves. The health sector is ready, but you must decide whether you suffer by getting infected, or protect yourself by following health guidelines and being vaccinated.”

There are also discussions under way about reforming the rules and regulations regarding vaccination, he added. (Colombo/Jan20/2022)


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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 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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