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Monday March 4th, 2024

Two new members appointed to Central Bank governing board

ECONOMYNEXT – The Central Bank of Sri Lanka has appointed two new members to its governing board, which is responsible for the administration and management of the CBSL and determination of general policies.

The GB comprises Governor Dr P Nandalal Weerasinghe, A N Fonseka, Dr Ravi Ratnayake, Anushka S Wijesinha and Vish Govindasamy.

“We hereby announce the appointments of Mr. Rajeev Amarasuriya and Mr. Manil Jayesinghe to the GB,” the Central Bank said in a statement.

The profiles of the newly appointed members, as per the statement, are as follows:

Mr. Rajeev Amarasuriya – with effect from 30 January 2024

Mr. Rajeev Amarasuriya is the Immediate Past Secretary of the Bar Association of Sri Lanka and has an extensive Appellate Court practice in the areas of Public Law and most branches of Civil Litigation including contractual, commercial, property, taxation, banking and other disciplines of the law.

Mr. Amarasuriya is a Board / Committee Member of several State and Private Sector Institutions including the Sri Lanka Accounting and Auditing Standards Monitoring Board, the Standing Committee of Legal Studies of the UGC and is a Council Member of the University of Colombo. He is also the Sri Lanka Country Representative of the Commonwealth Legal Education Association and an Executive Committee Member of LAWASIA.

He is a former Member of the governing body of the Sri Lanka Law College, the Council of Legal Education of Sri Lanka chaired by the Honourable Chief Justice and has served as former Commissioner of the Securities and Exchange Commission of Sri Lanka, former Member of the Board of Governors of the Sri Lanka National Arbitration Centre and the Immediate Past President of the Alumni Association of the University of Colombo. He holds a Degree in Law from the University of Colombo, is an Attorney-at-Law of the Supreme Court of Sri Lanka having topped the Final Bar Examination, is a Fellow Member of the Chartered Institute of Management Accountants (UK), a Fellow Member of the Institute of Certified Management Accountants of Sri Lanka and is an Alumnus of the Harvard Kennedy School (Executive Education). In April 2022, he was conferred as an AFGG – Raisina Fellow.

In 2013 he was the recipient of the CIMA Star Gold Award for the Most Outstanding CIMA Member below the age of 40 years and was named as a CIMA – LMD Trailblazer in 2021.

Mr. Manil Jayesinghe – with effect from 1 February 2024

Mr. Manil Jayesinghe is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka, Fellow Member of the Chartered Institute of Management Accountants (UK), Fellow Member of the Certified Management Accountants of Sri Lanka and a Member of the Chartered Institute of Public Finance & Accountancy.

Mr. Jayesinghe, who started his career at the Ernst & Young, gained extensive experience in a range of sectors including manufacturing, retail, hospitality, wholesale business and telecommunication, in his capacity as Partner of Ernst & Young for 30 years; and was the Country Managing Partner of Ernst & Young Sri Lanka & Maldives from 2021-2023, Head of Assurance Practice in Sri Lanka and the Profession Practice Director of Sri Lanka, from 2003 -2023. His forte in valuation of businesses and development of strategic plans for Financial Institutions, made Mr. Jayesinghe is a key resource in financial services. He also served as Head of the IFRS/SLAS Desk in Sri Lanka.
In his career spanning over 41 years of advisory and industry experience, he served as President of the Institute of Chartered Accountants of Sri Lanka, Member of the CIMA Sri Lanka Board, Council Member of the University of Moratuwa, Member of the International Accounting Education Board of the IFAC, Member of the Sri Lanka Accounting and Auditing Standards Monitoring Board, Council Member of CMA Sri Lanka, Member of the Audit Advisory Committee of the Central Bank, Advisor to Audit Committees of PLC’s and Banks, and Member of the National Chamber of Commerce of Sri Lanka.

Currently, he is Chairman of the Statutory Accounting Standards Committee, Member of the Statutory Auditing Standards Committee and serves on many other committees of the Institute of Chartered Accountants of Sri Lanka. He is also Member of the Financial Reporting Standards Implementation and Interpretation Committee (FRSIICS), Chairman of the Accounting Standards Committee of the South Asian Federation of Accountants (SAFA), Member of the Audit Committee of SLIM, Member of Securities & Exchange Commission of Sri Lanka, Member of the Board of Investments of Sri Lanka, and Independent Director of DIMO, Ceylon Hospitals, C.W. Mackie Plc and Sahasiya Investments Ltd.

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Sri Lanka rupee opens at 308.20/50 to the US dollar

Sri Lanka stocks reversed its falling trend and gained for the first time in six sessions on Tuesday closed stronger on Tuesday (21).

ECONOMYNEXT – Sri Lanka’s rupee opened at 308.20/50 to the US dollar Monday, from 308.80/90 on Friday, dealers said.

Bond yields were broadly steady.

A bond maturing on 01.08.2026 was quoted stable at 10.90/11.00 percent.

A bond maturing on 15.09.2027 was quoted at 11.90/12.00 percent from 11.90/12.05 percent.

A bond maturing on 01.07.2028 was quoted at 12.20/30 percent from 12.15/35 percent.

The Colombo Stock Exchange opened up; The All Share was up 0.60 percent at 10,755, and the S&P SL20 was up 1.24 percent at 3,077. (Colombo/Mar4/2024)

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Sri Lanka central bank swaps top $3.2bn by December

ECONOMYNEXT – Sri Lanka’s central bank borrowed US dollars from various counterparties through swap transactions, which had topped 3.2 billion US dollars by December 2024, official data show.

The net short position, including swaps disclosed by the central bank, grew by over almost 1.28 billion US dollars from December 2022 to 3,280 million dollars.

The gross position grew from 2,263 million dollars to 3,280 million US dollars over the year.

The central bank supported some state banks with dollars to cover their dollar exposures, which had since been paid back.

By December reported gross reserves of the central bank was 4,491 million US dollars, against swaps of 3,280 billion US dollars.

Swaps of around 1500 related to the People Bank of China.

Swaps allow a central bank to increase gross reserves, without raising domestic interest rates.

Swaps with domestic counterparties lead to liquidity being injected into money markets, which can be mopped if domestic credit growth is moderate.

At the moment many private banks have large dollar positions invested outside the country, which cannot be used for transactions domestically because of a money monopoly given to macro-economists. (Sri Lanka repays debt or collects reserves of U$5bn via banking system since rate correction)

However unwinding swaps after private credit has picked, or engaging in swaps after private credit has picked up, may lead to money being injected to maintain the policy rate, leading to excess credit by banks and balance of payments deficits and or currency collapses, analysts say.

Central bank swaps in the third quarter of 2018 led to a collapse of the currency under the ‘exchange rate as the first line of defence’ policy peddled to Sri Lanka, critics have said earlier.

Domestic currency proceeds of swaps were the primary ammunition to bust East Asian currencies in 1997-98.

Any depreciation after the swap proceeds have been used for imports (effectively mis-targeting rates) a central bank will run a forex loss.

The PBOC however had put a rule, preventing the use of the swap after gross reserves fell below 3 – months of imports, preventing Sri Lanka from getting into further trouble through the use of official reserves for private imports.

Sri Lanka’s central bank also used borrowings from the Reserve Bank of India, via the Asian Clearing Union to run BOP deficits.

Losses from exposed dollar positions of central banks which have gained ‘independence’ from fiscal rules and parliaments and engaged in macro-economic policy, including the Fed, have led to taxpayers bearing the losses in the end.

Swaps were invented by the Fed in the early 1960s, as it deployed macro-economic policy (printed money for growth) threatening its gold reserves and the Bretton Woods system.

Sri Lanka has other borrowings also, including from the IMF, which has made net foreign assets of the central bank negative. (Colombo/Mar05/2024)

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Sri Lanka loses MICE tourists to Thailand on minimum room rates

ECONOMYNEXT – Sri Lanka has lost Meetings, Incentive Travel and Exhibition travelers to competitors in East Asia and India due to minimum room rates as higher standard rooms were available in other countries at lower prices, industry officials said.

President of the Sri Lanka Association of Inbound Tourist (SLAITO) Nishad Wijetunga said they the industry managed to retain a majority of booking made before the minimum room rates were imposed by the state last year.

“However, there were MICE groups that were supposed to come and cancelled Sri Lanka and went to places like Thailand and other parts of India and we lost,” Wijetunga told EconomyNext.

“We know that large groups of MICE (tourists) are affected.”

India is a key source of MICE tourists to Sri Lanka.

Sri Lanka’s businesses have got used to protectionism and try to push up prices with import taxes to extract more money from customers using the coercive power of the state, with tiles and steel being among the most prominent examples.

RELATED: Stand-alone hotels unviable in Sri Lanka due to high construction, capital costs

High priced tiles and steel in turn makes hotels expensive to build and make the leisure industry less competitive, analysts say.

However, in tourism, unlike in building materials customers are not trapped within the country and are free to move to other markets.

Managing Director of CEC Events and Travels, Imran Hassan, said the industry lost groups to East Asia due to minimum room rate.

In one instance, an operator was in discussions to get a group of 900 passengers.

“And that moved out to Thailand,” Hassan said. “Like that, there are many instances that the minimum room rate was not conducive.”

Thailand in 2023 attracted 28.04 million tourists.

A group that used to come to Sri Lanka annually used to take 40 to 50 five-star hotel rooms. This time Sri Lanka competed by offering lower standard.

“This year, they’re only giving 10 rooms to the five-star hotels,” Hassan explained. “They are staying in smaller hotels because they can’t afford it because it has become so expensive.”

“But overall, we are working with the authorities to correct it.

“We don’t mind demand and supply situation taking the rates up as in the Maldives. But what we are saying is keep an open market.”

RELATED : Sri Lanka should say good bye to minimum room rates: President

President Ranil Wickremesinghe has said Sri Lanka cannot progress with protectionism and the country has to learn to face competition. (Colombo/Mar04/2024)

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