International news

World leaders condemn ‘assault on democracy’ at US Capitol

Thursday January 7, 2021 2:49 pm

AFP – World leaders and governments on Wednesday expressed shock and outrage at the storming of the US Capitol in Washington by supporters of President Donald Trump.

– Britain –

British Prime Minister Boris Johnson on Twitter condemned the “disgraceful scenes in U.S. Congress. The United States stands for democracy around the world and it is now vital that there should be a peaceful and orderly transfer of power”.

British Foreign Secretary Dominic Raab added in his own tweet: “The US rightly takes great pride in its democracy, and there can be no justification for these violent attempts to frustrate the lawful and proper transition of power.”

– European Union –

The EU’s foreign policy chief condemned an “assault on US democracy”.

http://anycast-iris-p-sco-http.afp.com/components/501998e50c6e5da42d5a116b4b4f3eecea8aa059″In the eyes of the world, American democracy tonight appears under siege,” Josep Borrell tweeted.

Calling the action an “assault on US democracy, its institutions and the rule of law”, he added: “This is not America. The election results of 3 November must be fully respected.”

– France –

French leader Emmanuel Macron said: “We will not give in to the violence of a few who want to question” democracy.

In a video posted on his official Twitter account, he added: “What happened today in Washington is not American”.

French Foreign Minister Jean-Yves Le Drian also condemned “a serious attack on democracy”.

– Germany –

German Foreign Minister Heiko Maas called on Trump supporters to “stop trampling on democracy”.

http://anycast-iris-p-sco-http.afp.com/components/179efe0f1c8a241c746f1725e483f40659462d5c”Trump and his supporters should finally accept the decision of American voters and stop trampling on democracy,” Maas tweeted.

“The enemies of democracy will be pleased to see these incredible images from Washington DC,” he added. “Inflammatory words turn into violent actions.”

German Finance Minister Olaf Scholz, who is also the vice chancellor, likewise condemned the “disturbing images” from Washington.

– Canada –

Prime Minister Justin Trudeau tweeted that the scenes at the US Capitol were an “attack on democracy.”

“Canadians are deeply disturbed and saddened by the attack on democracy in the United States, our closest ally and neighbour,” he said.

– Australia –

Australian PM Scott Morrison condemned the “very distressing scenes” in the US.

“We condemn these acts of violence and look forward to a peaceful transfer of Government to the newly elected administration in the great American democratic tradition,” he tweeted.

– New Zealand –

Jacinda Ardern tweeted: “Democracy – the right of people to exercise a vote, have their voice heard and then have that decision upheld peacefully should never be undone by a mob.”

The PM added her country’s thoughts were with everyone “devastated” by today’s events, adding: “what is happening is wrong.”

– NATO –

“Shocking scenes in Washington, DC,” NATO chief Jens Stoltenberg tweeted. “The outcome of this democratic election must be respected.”

– The Netherlands –

“Horrible images from Washington D.C. Dear @realDonaldTrump, recognise @JoeBiden as the next president today,” Dutch Prime Minister Mark Rutte said on Twitter.

The plain-speaking Rutte once during a visit to the White House in 2018 interrupted Trump with a loud “no” when Trump made an assertion about EU-US trade.

– Ireland –

Irish premier Micheal Martin, who has invited the Irish-American Biden to visit his ancestral homeland early in his presidency, tweeted his condemnation.

“The Irish people have a deep connection with the United States of America, built up over many generations. I know that many, like me, will be watching the scenes unfolding in Washington DC with great concern and dismay,” Martin said.

– India –

Indian Prime Minister Narendra Modi, a Trump ally who has heaped praise on the outgoing US president in the past, said he was “distressed to see news about rioting and violence” in Washington.

“Orderly and peaceful transfer of power must continue. The democratic process cannot be allowed to be subverted through unlawful protests,” the Hindu nationalist leader tweeted.

– Greece –

“Extremely troubled by the violence and horrible events taking place in Washington D.C. American democracy is resilient, deeply rooted and will overcome this crisis,” Greek Prime Minister Kyriakos Mitsotakis said in a tweet.

– Turkey –

“We are following with concern the internal developments happening in the US,” the Turkish foreign ministry said in a statement.

“We call on all parties in the US to maintain restrain and prudence. We believe the US will overcome this internal political crisis in a mature manner.”

– Austria –

“This is an unacceptable assault on democracy. A peaceful and orderly transfer of power must be ensured,” said Austrian Chancellor Sebastian Kurz on Twitter.

– Czech Republic –

Czech Foreign Minister Tomas Petricek said in a tweet: “The looting and violence at the US Senate are not a good example for countries where democracy is fighting hard for a place in the sun. Given the emotions sparked by the US presidential election, we could expect today’s session to be far from ordinary. Where were the police and the Senate bodyguards…?”

– Denmark –

“Extremism, violence, polarization and violence is never the way forward. Terrible pictures from Washington. May democracy be brought back to working again,” Denmark’s Prime Minister Mette Frederiksen said on Facebook

– Spain –

Spanish president Pedro Sanchez tweeted he was following events in Washington with “concern”.

“I trust in the strength of America’s democracy. The new Presidency of @JoeBiden will overcome this time of tension, uniting the American people.”

– Slovenia –

Slovenia’s right-wing Prime Minister Janez Jansa, who backed Trump and who has yet to congratulate Biden on his victory, tweeted: “All should be very troubled by the violence taking place in Washington D.C.”

“We hope American democracy is resilient, deeply rooted and will overcome this crisis. Democracy presupposes peaceful protest, but violence and death threats —from Left or Right— are ALWAYS wrong.”

– Fiji –

The prime minister of Fiji Frank Bainimarama — who lead a coup in 2006 and was accused of assaulting an opposition lawmaker in 2019 — added his condemnation.

“The violent scenes we saw in Washington today are an affront to democracies around the globe. True and genuine democracy is a precious treasure that no nation should ever take for granted,” he tweeted.

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Bonds & Forex

Sri Lanka rupee at 296.75/297.25 to dollar at open, bond yields steady

Tuesday May 30, 2023 9:37 am

ECONOMYNEXT – Sri Lanka’s rupee opened at 297 /297.50 against the US dollar in the spot market on Monday, while bond yields were steady, dealers said.

The rupee closed at 296.75 /297.25 to the US dollar on Monday after opening around 296.50 /297.50 rupees.

A bond maturing on 01.09.2027 was quoted at 26.50/75 percent steady from Friday’s close at 26.50/65 percent.

Sri Lanka’s rupee is appreciating amid negative private credit which has reduced outflows after the central bank hiked rates and stopped printing money. (Colombo/ May 29/2023)

Economy

Sri Lanka rupee appreciation squeezes exporters

Tuesday May 30, 2023 7:10 am

ECONOMYNEXT – Sri Lanka’s recent appreciation is starting to squeeze apparel exporters as their domestic costs including wages and energy, were hiked over recent months, when the rupee fell steeply, an industry official said.

Companies had raised salaries and emoluments at rates averaging 25 percent for workers while transport costs have also gone up but not has come down, Yohan Lawrence Director General of the Join Apparel Association Forum said.

Apparel factories in particular also provide transport and some meals for workers.

Electricity prices have also been hiked, based on the rupee which was weaker. A tariff cut is expected from June after the rupee appreciated and imported fuel prices fell.

Sri Lanka’s rupee collapsed in 2022 from 200 to 360 to the US dollar as interest rates were suppressed with liquidity injections and a failed attempt was made to float the rupee with surrender requirement in place.

From the second half of 2022, with higher interest rates and negative private credit, the central bank has avoided printing money under conditions which are generally accepted to be difficult, and is broadly running deflationary open market operations, triggering a balance of payments surplus and putting the rupee under upward pressure.

Central bank net credit to government which was 3,302 billion rupees in September in 2022, was down to 3,209 billion rupees by March 2023, part of which was due to rollovers, analysts say.

Market pricing of fuel and electricity by the Ministry of Energy and also spending controls and tax hikes buy have also helped contain domestic credit.

Sri Lanka also has mandatory conversion rules, imposed on exporters, which is a concern for exporters.

“We believe rupee should be at its natural level, but with forced conversions you won’t get the correct picture,” Lawrence said.

Sri Lanka has to release a plan to remove import controls, exchange controls and other restrictions imposed in the period where policy rates were suppressed with liquidity injections (so-called multiple currency practices and capital flow measures) by June under the IMF program.

Apparel exporters have also seen orders fall amid tighter conditions in Western markets.

The central bank has to peg (intervene actively in forex markets and create money) to meet reserve targets under an IMF program and cannot free float (avoid creating money through international operations) the rupee.

The newly created money has generally been absorbed in an overnight liquidity shortage.

There have also been foreign purchases of rupee Treasuries. Amid a contraction in credit, the inflows also do not turn into imports fast as the money if the money is spent.

By making purchases a little below what is allowed by the contraction in domestic credit, the rupee can be allowed to appreciate, analysts say.

The central bank has so far allowed the rupee to appreciate to around 300 to the US dollar from 360 levels under a transparent guidance peg up to February.

Except after the 2008/2009 currency crisis, Sri Lanka’s central bank has not previously allowed to the rupee to appreciate under IMF programs where the first year in particular sees balance of payments surpluses, before private credit and domestic investments picks up again.

One of the considerations used by third world central banks are Real Effective Exchange Rate indices.

The REER of the Sri Lanka rupee based on a basket of currencies calculated by the central bank was 61.12 points in February before the rupee was allowed to appreciate by lifting a surrender rule.

In March the index went up to 69.55 points, but remained steeply below 100. Real effective exchange rates are calculated also taking into account inflation in counterpart trading nations.

Sri Lanka’s inflation index had hardly risen since September amid rupee gains. Falling food prices can help contain pressure for further wage hikes, analysts say. (Colombo/May30/2023)

Economy

Sri Lanka forum to discuss central bank independence vs sound money

Tuesday May 30, 2023 6:03 am

ECONOMYNEXT – Central bank independence and sound money will be under discussion at a public event organized by the Sri Lanka chapter of the Bastiat Society today, May 30, as island is recovering from the worst episode of monetary instability since independence.

The forum will feature Lawrence H White, Professor of Economics at George Mason University in the US, and W A Wijewardene, former Deputy Central Bank Governor, of the Central Bank of Sri Lanka.

“The discussion will compare the current system against alternative systems and explore the relationship between such banking systems and sound money,” the organizers said.

White specializes in the theory and history of banking and money. He is the author of “The Clash of Economic Ideas” (2012), “The Theory of Monetary Institutions” (1999), “Free Banking in Britain” (2nd ed., 1995), and “Competition and Currency” (1989).

Wijewardene has been speaking on central bank independence in Sri Lanka long before it became a topic of wider discussion, but also on accountability.

In April, a Central Bank Independence and Other Matters, which includes a collection of his orations on the subject over the years as well a recent development was published.

The discussion comes as independent central banks in the West have created the worst inflation since the 1970s and early 1980s and are apparently unaccountable to parliaments and the public.

The early 1980s also saw the first wave of external debt crises in so-called soft-pegged countries in Latin America and Eastern Europe in particular as the US and UK tightened policy to end the Great Inflation.

The discussion will be held at 7.00 pm at the Lakmahal Community Library and those interested can register online, the organizers said. (Colombo/May30/2023)