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Reserves fall to lowest since 2009, rupee strengthening to be short-lived: report

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by Sanath Nanayakkare

Sri Lanka’s Foreign reserves had dropped to USD 4.1bn in March 2021, the lowest since August 2009, on the back of over US$ 4bn outstanding debt payment during April-December 2021 period, a report issued by First Capital Research yesterday said.

According to the report, rupee appreciation is likely to be short-lived considering Sri Lanka’s depleting foreign reserve position, high foreign currency debt repayment requirement and limited funding sources available in the market are expected to further increase depreciation pressure on the currency during 2Q and 3Q.

“We maintain our exchange rate target for 1H2021 at Rs. 196-202 with 2021 year-end target at Rs. 205-215 as mentioned in our ‘Investment Strategy 2021 – January 2021,” the report recalls.

“Sri Lankan rupee appreciated 5% against the US dollar over the last 2 market days reversing the continuous accelerated depreciation witnessed in January-April 2021. On 12th April, Sri Lankan rupee recorded a historical low of Rs. 201:1 US$. Ministry of Finance (MoF) reported on the same day that the government of Sri Lanka entered into a loan agreement with the China Development Bank (CDB) for US$ 500mn and MoF expected the funds to be disbursed during the same week. Following the announcement, the market registered a steep appreciation with mid-rate recording at Rs. 190.9 on April 19,” it says.

The total foreign debt repayment (capital and interest) for 2021 is US$ 6 bn, according to the report.

Meanwhile FC Research believes that the temporary appreciation in USD-LKR, may adversely impact earnings of export companies such as Hayleys, Haycarb, Dipped Products, MGT Knitting Mills, Teejay Lanka, Expolanka Holdings etc. in the short term.

“However, considering the potential future currency pressure, we expect an overall depreciation of approximately 12% for the rupee providing a significant gain for companies with foreign currency revenue”, FC research predicts.



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Switzerland to vote on plan to cap population at 10 million

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A yes-vote poster paints the planned cap (L) as a way of protecting Switzerland, but opponents call it a "chaos initiative"[BBC]

Can a country put a fixed limit on its population? That is the question Switzerland will be answering on Sunday when voters go the polls to decide on a proposal to cap their population at 10 million, a move that has exposed divisions about immigration in the Alpine nation.

The move is backed by the right-wing Swiss People’s Party, which describes it as a “sustainability initiative” aimed at easing pressure on housing, public services and the environment. However some voters see this as the party’s latest anti-immigration move.

Dubbing it a “chaos initiative”, the government, other political parties, business leaders and trade unions argue it will deprive hospitals and hotels of much needed staff, and damage hard-won relations with the European Union, leaving non-EU member Switzerland isolated in a very risky world.

Switzerland’s population has grown rapidly since 2002, when it stood at 7.3 million. Now it is 9.1 million, 27% of whom are Swiss residents who were born abroad.

Switzerland’s system of direct democracy means all major decisions are taken via the ballot box. Campaigners simply have to gather 100,000 signatures to ensure a nationwide vote.

Many voters are concerned by overcrowded trains, expensive apartments and rising health costs.

The latest opinion polls indicate this could be a very close vote.

They suggest voters are inching towards a no vote by a wafer thin margin, with 52% opposed – but polls remain divided, with 45% saying they are in favour of the proposal and a significant number of voters still undecided.

[BBC]

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Court orders former Atamasthanadhipathi to provide blood sample for DNA testing

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Anuradhapura Chief Magistrate, Siyapath Sasindu Wickramaratne, on Friday (12) ordered former Atamasthanadhipathi Pallegama Hemarathana Thera, who stands accused in a case involving the alleged serious sexual abuse of a minor girl, to provide a blood sample for DNA testing.

Accordingly, the court directed the suspect monk to appear before the Government Analyst’s Department on June 16 and provide a blood sample to the Government Analyst.

The order was issued after considering a further report submitted to court by the Nittambuwa Police.

Police informed the court that, pursuant to an earlier court order, certain case material had been forwarded to the Government Analyst on May 4, 2026, for DNA examination.

According to police, the material consisted of clothing allegedly stained with blood, which had been buried and concealed by the girl and later recovered during investigations.

Police further informed the court that the Government Analyst’s report had confirmed the presence of DNA evidence on the clothing.

Investigators told court that it was necessary to obtain a biological sample from the suspect monk in order to compare it with the DNA evidence recovered from the garments.

Police therefore requested an order compelling the suspect to provide a blood sample so that it could be determined whether the DNA evidence found on the girl’s clothing matched that of the suspect.

Having considered the submissions, the Magistrate ordered the suspect monk to provide the blood sample. The court also directed the Government Analyst to submit the report of the subsequent DNA examination.Pallegama Hemarathana Thera was previously remanded in connection with the case and was later released on stringent bail conditions.

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High fuel prices spark outrage in transport sector, services halved

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(Asiatimes) From this week, those using private buses in Sri Lanka may face severe transport disruption, as operators in the sector have decided to cut services by 50%. Among the reasons for the protest are mounting losses, rising fuel costs and the government’s failure to grant fare concessions. At a press conference held on 7 June, Gemunu Wijeratne, president of the Sri Lanka Private Bus Owners’ Association, explained that “the authorities have not responded positively to requests for a review of bus fares and support measures regarding fuel”.

Meanwhile, around 25% of private transport vehicles have already voluntarily ceased operations due to financial difficulties. According to the majority of owners, “the decision comes after ongoing disputes with the authorities regarding fare adjustments and financial relief, which have not been met to date, despite numerous requests made over a long period”. Commuters, especially in Colombo and the surrounding areas, risk facing delays and overcrowding as the reduced fleet operates under the new directive.

According to Wijeratne, “the association will continue to provide a reduced service until the government approves a revised bus fare, in line with the rise in fuel prices”. The alternative for the government, he continues, is to provide “a direct subsidy to operators, as recent fuel price increases have placed considerable pressure on daily transport operators”.

During peak hours such as the morning, school finishing times and the evening rush hour, only essential services will be guaranteed. During these times, instead of four journeys, only three will be made. Overall, operations will be reduced to around 50%. “The government,” the chairman clarifies, “must take responsibility for this situation, as the majority of students and employees use private buses for their daily commutes, particularly to and from Colombo to various parts of the country.”

Operators in the sector point out that although they requested a temporary exemption to guarantee bus services for one month, neither the National Transport Commission nor the Minister of Transport responded positively. The annual fare review is due to be implemented during the first week of July, adding that they have the “legal authority” to “apply the revised fares”. On 5 June, Wijeratne continues, “we held discussions that were unsuccessful. Diesel prices are expected to rise by the end of this month. In view of all this, we are proceeding with the fare review. This year’s fare adjustment will be difficult for the public to bear, as all costs have risen by around 20–25%”.

The president of the Association of Private Bus Owners concludes by noting that “we cannot continue to operate at a loss. For this reason, we have asked the authorities for some concessions on diesel within the regulatory framework, but these measures have not been implemented. We have therefore decided to step up our industrial action. This week we will intensify our action by changing timetables and limiting operations. The decision was taken – he notes – due to the lack of a positive response to the request for a fare review following the recent rise in fuel prices”.

Recently, the Ceylon Petroleum Corporation (CPC) increased fuel prices in accordance with its monthly pricing formula. Among the changes, the price of a litre of petrol was increased by 15 rupees, rendering the current tariff structures unsustainable. To grasp the scale of the emergency and understand the impact on the population, AsiaNews spoke to Akalanka Punchihewa, Senuli Amrasekara and Dunesh Mayadunne, commuters from various parts of the country who travel to the capital every day for work. “We struggle,” they confirm, “to get to work from Kandy, Kurunegala and Galle. The recent decision by private bus operators is a severe blow, as we have to spend several hours in long queues just to get on a bus. The service provided by buses run by the Sri Lanka Transport Board (SLTB) is inferior to that of private buses. And we cannot,” the commuters conclude, “afford to travel to work by car or motorbike, as we are unable to bear the increased cost of fuel.”

by Arundathie Abeysinghe

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