Connect with us

Business

CB Governor confident inflation will fall to single digit by end of 2023

Published

on

Sri Lanka eyes IMF first tranche in March 2023

Last year’s economic contraction expected to be around 7.5%- 8.0%

This year expected to see stability without a contraction

Sequencing of policy action to be continued

By Sanath Nanayakkare

I clearly see that by the end of the year, inflation will fall to single digit, and I can say that with confidence as the Governor of the Central Bank, Dr. Nandalal Weerasinghe said during an interview recently.

“At the time the IMF staff and the Sri Lankan authorities reached a staff-level agreement in September 2022 to support Sri Lanka under an Extended Fund Facility (EFF) of about US$ 2.9 billion, their forecast was Sri Lanka’s inflation would exceed 70% by December 2022. Many people thought inflation would increase by 100%. In fact, food inflation soared to 95%. But having noted the higher than expected escalation of headline inflation and the increased persistence of high inflation, we increased interest rates to contain it. Now inflation has been trending down steadily since September 2022. I clearly see that by the end of the year, inflation will decline to single digit,” he said.

When he was told that some people accuse him for the economic contraction triggered by high interest rates, he replied,” When economic contraction takes place, it hurts everyone. Trade volumes decline, industrial outputs decline and the impacts are felt at all levels. However, for the country to get out of the economic crisis, painful measures needed to be taken which could lead to economic contraction, but that’s the only way out to stabilize the economy. If there hadn’t been an economic crisis, there would have been no need for contracting the economy. Imagine what would have happened if we hadn’t increased interest rates. Interest rate is a tool we use to contain high inflation,” he said.

“Businesses suffer mainly because of high inflation that has a direct impact on their cost of production. When upward inflation is controlled, the cost of production can be controlled and the businesses can operate well with consumers’ purchasing power intact. Inflation is the main enemy of any economy. So tackling inflation is our main responsibility and that’s what we have done. When inflation goes down, interest rates will also go down. And also when the uncertainty in the market abates, interest rates will go down. It is not logical to assume that interest rates will remain at the same level for ever. We controlled the inflation by increasing interest rates. It was like systematically preventing the blowing up of a highly inflated balloon. If it hadn’t been done, the economy would have been in smithereens. Talks with the IMF, debt sustainability, increasing interest rates, balancing of monetary expansion should have been done when the circumstances demanded to do so. If those actions had been taken at the correct time, inflation wouldn’t have been this high. But now there is no other way to get out of the situation we are in, “he said.

Asked whether he hoped the first tranche of the IMF would be released soon, he said,” We strongly hope that we will get the IMF facility’s first tranche in March, 2023. And when we get that, it will instill the confidence of multilateral bodies such as the World Bank and ADB in our financial discipline to give us loans at concessionary rates. They have already agreed to do so. In addition to that, there will be more foreign inflows to our equity market and foreign investment portfolio. These will ease our balance of payment issue, help lower our interest rates and rationalize our exchange rate. Then the 3-month T-Bill yield rate which is still high will move in line with Central Bank’s policy rates.

With the realization of the IMF facility, uncertainty-driven market interest rates will dissipate and will come down to normal levels. This can’t still happen because risk-free government security rates are still at 30% – though down from its previous 33%. Prime lending rates are still affected by this. Many have complained to me that interest rates are too high, and therefore, it’s difficult to do business and they find it very difficult to repay their loans. That is true. The reason for this situation is the lack of foreign currency.

So when we have more foreign currency, interest rates can be lowered without affecting our foreign reserves, while keeping our imports under control. We can’t go back to a chaotic situation like in June 2022. Last year could have seen an economic contraction of 7.5- 8.0%. This year we need to stabilize the economy and achieve stable performance in all four quarters. This has to be done very carefully with proper sequencing so that all sectors can operate smoothly. Although the situation appears to be normal on the facade, it is still not so. There is still a deficit. That’s why the constant sequencing of our policy action is crucial,” the Governor said.



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Mahindra Ideal Motors celebrates gala ‘Excellence Awards’ honouring outstanding performance and innovation

Published

on

The Mahindra Ideal Motors Excellence Awards ceremony, a grand celebration to recognize dealers and other stakeholders of Ideal Motors, was held at the Wave n’ Lake Banquet Hall & Restaurant in Welisara recently.

The event was graced by the presence of special guests including Nalin Welgama, Founder and Chairman Ideal Motors, Dilani Yatawaka, Group Managing Director/CEO Ideal Motors, Nimisha Welgama, Director Legal and Corporate Affairs Ideal Motor, Sachin Arolka, Head International Operations, Auto Division Mahindra & Mahindra India. Senthil Selvaraju, Head International Operations and Customer Service Automotive Division Mahindra & Mahindra India, Sujeeth Jayant, Country Head Mahindra & Mahindra India and Shitam Kundu, Head Domestic Services Mahindra & Mahindra India.

Also, in attendance from Ideal Motors were Kasun Fernando, General Manager Commercial Vehicle Sales Division, Sameera Bamunuarachchi, Deputy General Manager Spare Parts, Logistics & Inventory and Prasanna Manamperi, Deputy General Manager After Seles Service.

Speaking at the event, Nalin Welgama Ideal Motors Founder and Chairman said, “When we began our journey with Mahindra in 2009, the previous company had sold 300 vehicles in the country, of which nearly 150 had various defects. At that time our journey began by engaging with the parent company in India and repairing those vehicles free of charge. That commitment has brought us to where we are today. As we believe, our journey truly begins after the sale. We are dedicated to strengthening our customers, and in doing so, strengthening ourselves. That is how we transformed the after-sales service experience.”

He added, “Our main strength is the Mahindra Bolero, which has sold more than 10,000 units in just two years. In a very short period, we grew from zero to over 100,000 vehicles sold. This is not my victory, but the victory of all of you who contributed to it. Despite the challenges of the COVID-19 pandemic and the economic crisis we faced, this awards ceremony was organized to express our gratitude to all of you who trusted our institution and stood by us. Let us continue our victorious journey together.”

Dilani Yatawaka, Group Managing Director Ideal Motors, said: “Today is a very happy day for us. This is the first time in history of the organisation, that representatives of our vehicles, spare parts, services, and financial institutions are meeting together under one roof.”

Speaking on the occasion, Sachin Arolka, Head International Operations, Auto Division Mahindra & Mahindra India, stated that Ideal Motors in Sri Lanka is one of the largest seller of Mahindra vehicles in Asia.

More than 300 dealers and finance partners participated in the event which concluded with dinner, fellowship and entertainment.

Continue Reading

Business

Police engagement supports wildlife protection in hill country

Published

on

Strengthening conservation through active law enforcement

An awareness and capacity-building program on wildlife crime prevention, with a special focus on the Sri Lankan leopard (Panthera pardus kotiya), was successfully conducted on March 20 at the Dimbula Athletics & Cricket Club, Radella.

The session was organized under the ongoing Multi-Regional Leopard Research and Conservation Project implemented by the Wildlife & Nature Protection Society (WNPS), in collaboration with LOLC. It brought together senior officers representing 28 Police stations across the Nuwara Eliya and Kandy districts, underscoring the growing importance of law enforcement in conservation efforts within multi-use landscapes, a WNPS news release said.

The Central Highlands present a unique conservation challenge, where increasing habitat loss and fragmentation, depletion of natural prey, and use of snares continue to threaten leopards inhabiting these landscapes majority outside formally protected areas. The session therefore focused on strengthening the capacity of Police officers to identify, prevent, and respond to wildlife crimes, while fostering closer coordination with conservation stakeholders, it explained.

Co-Chair of the Wildcats Subcommittee, Prof. Enoka Kudavidanage, highlighted the ecological and economic significance of leopards as apex predators, emphasizing their role in maintaining ecosystem balance and supporting nature-based tourism. She also outlined the current conservation challenges in the Hill Country and presented ongoing interventions under the WNPS–LOLC project.

Dr. Sanjaya Weerakody, Postdoctoral Fellow at the Xishuangbanna Tropical Botanical Garden (XTBG), Chinese Academy of Sciences, shared key research findings on leopard mortality trends over the past 17 years revealing concerning patterns, including the disproportionate loss of mature male individuals and the increasing prevalence of snaring as a primary cause of death highlighting an urgent need for targeted enforcement.

Attorney – at – Law Charaka Jayaratne provided an in-depth overview of the legal provisions under the Fauna and Flora Protection Ordinance, with particular attention to offences related to snaring. He discussed how Police can take more proactive and effective action, identifying gaps in current approaches and suggesting practical measures to strengthen enforcement outcomes.

Adding further perspective, Samantha Gunasekara, former Deputy Director of Customs and Chairman of the Marine Environment Protection Authority (MEPA), spoke on the broader context of illegal wildlife trade in Sri Lanka. Drawing from past cases and recent observations, he highlighted emerging trends and risks associated with wildlife trafficking.

Representing the Department of Wildlife Conservation, Ranger Srinath Dissanayake of the Hakgala Wildlife Range shared recent cases on leopard deaths and rescue operations recorded in 2025. He emphasized on personal observations, importance of timely intervention, and strong collaboration between field officers and the Police to mitigate human–wildlife conflict and prevent avoidable losses.

An interactive discussion followed, allowing officers to raise questions, clarify procedures, and exchange experiences while sharing their feedback as well. This dialogue contributed to reinforcing the value of strategic engagement between the Police, the Department of Wildlife Conservation, and conservation partners while strengthening inter-agency understanding and highlighting the need for coordinated responses during leopard-related incidents.

The session commenced with opening remarks by WNPS President Graham Marshall, who expressed appreciation for the participation of the Sri Lanka Police and reiterated the critical role of law enforcement in safeguarding biodiversity beyond protected areas.

WNPS Past President and WNPS LOLC Project Head Spencer Manuelpillai, Project Coordinator Gihani Hettiarachchi, Regional Center Coordinators, Thilanka Dissanayake and Attorney-at-Law Malaka Palliyaguruge were also present as part of the WNPS team.

WNPS extends its sincere appreciation to all officers who participated for their commitment and active engagement. Supported by LOLC, these initiatives form part of a broader effort to strengthen practical conservation through collaboration, knowledge sharing, and effective enforcement in Sri Lanka’s Hill Country.

Continue Reading

Business

Mangala Tex marks expansion with new Kurunegala Branch

Published

on

Fashion retail leader Mangala Tex celebrated the grand opening of its newest branch in Kurunegala on Saturday, March 14, 2026, adding a vibrant new dimension to the city’s commercial landscape.

Since its inception, Mangala Tex has been synonymous with style, durability, and quality, earning a lasting reputation as a premier clothing retailer. Guided by the visionary leadership of Chairman Ronald Nimal Hope, the brand has successfully established a strong presence with thriving outlets in Yatinuwara Veediya, Kandy, Cross Street, Kandy, and Peradeniya, Kandy.

The Kurunegala expansion marks a significant milestone in the company’s growth, bringing its signature fashion offerings closer to a wider customer base. True to its slogan, “Let Your Clothing Do The Talking,” the new store features an extensive range of apparel catering to all age groups, blending contemporary style with durable, high-quality fabrics.

Shoppers at the Kurunegala branch are greeted by a welcoming atmosphere and attentive staff, which long-time customers cite as key reasons for their loyalty. The store’s combination of trendy designs, reliable quality, and customer-centric service continues to set it apart in Sri Lanka’s competitive fashion retail sector.

Mangala Tex now employs more than 120 staff members across its branches, remaining a proudly family-driven enterprise alongside Managing Director Pahan Dissanayaka and Directress M M G P Dissanayaka.

With the official opening in Kurunegala, Mangala Tex demonstrates that consistent quality, style, and service can drive sustained growth, expanding the brand’s reach to new communities while reinforcing its status as a trusted name in Sri Lankan fashion.

Text and Pix by SK Samaranayake

Continue Reading

Trending