News

Importers, exporters scapegoated for shortage of foreign currency

Published

5 years ago

2021/07/9

by Sanath Nanayakkare

Sri Lankan importers and exporters are blamed for the mismatch in cash flows into the country even though the problem is due to successive governments having borrowed heavily from international lenders beyond their means without any sustainable strategy to repay those loans, says an expert.

At a virtual press briefing held by the Central Bank of Sri Lanka yesterday, Deputy Governor Dhammika Nanayakkara responding to a question on the shortage of foreign currency liquidity in the market said: “On the one hand, importers are looking to frontload their imports assuming the rupee will depreciate and their import costs will go up. They borrow rupees and purchase dollars from the market and try to hoard goods. On the other hand, exporters are holding on to their dollar balances without converting them into rupees thinking they can sell them at a higher value and make a gain when the dollar appreciates. But the export proceed conversion rule which came into effect on May 28, requires exporters to convert 25 percent of repatriated proceeds with possible exemptions up to 10 percent for specific export sectors or industries or individual exporters based on their import input requirements.”.

“Another tactic the commercial banks are adopting is when there is a lot of demand to open letters of credit (LCs) for imports, the banks ponder over the real necessity to import such goods and act on it. That is why a particular bank would ask importers to come and open their LC on another day or Bank A would ask a prospective importer to go to Bank B for this purpose. However, so far this has not affected the import of essential or intermediary goods, the Bank said.

Central Bank Governor Prof. W. D Lakshman said: “We have introduced measures to rationalise selected non- essential imports. We have proposed to the government to put strict regulations to curb the import of non-essential goods and this is still at discussion level. Some proposals we make to the government are accepted and some are not.” He said this responding to a question whether household electric goods and items which are identified by some sections as luxury goods would also come under the import ban anytime soon.

Central Bank’s Director of Economic Research Dr. Chandranath Amarasekara referred to the rule of mandatory conversion of 10% of workers remittances to rupees by banks on a weekly basis as another measure to add to build up the foreign exchange reserves.

Speaking to the media on July 5, State Minister of Finance, Capital Markets and State Enterprise Reforms Ajith Nivard Cabraal said both exporters and importers were willing to cooperate with the government to find a solution to the foreign exchange liquidity issue, as it would be beneficial for all stakeholder in the long term.

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USS Canberra makes port call in Colombo

Published

10 hours ago

2026/06/12

Priyan

The United States Navy’s USS Canberra (LCS 30) arrived at the port of Colombo for replenishment purposes on 12 Jun 26.

The visiting ship was welcomed by the Sri Lanka Navy
in compliance of naval traditions.

USS Canberra, a Littoral Combat Ship, is commanded by Commander J McLaughlin.

News

Complete the Proposed Education Reform Policy Framework Within One Month – President

Published

11 hours ago

2026/06/12

Priyan

President Anura Kumara Dissanayake has instructed officials to complete work on the proposed Education Reform Policy Framework within one month.

The President issued these instructions during a discussion held on Wednesday (10 June) at the Presidential Secretariat on the education policy concept paper presented by the National Education Commission.

At the meeting, the Chairman of the National Education Commission stated that the current education reforms are being undertaken across several pillars: early childhood education, general education (primary, secondary and tertiary), higher education, vocational education, technological education, digital education and non-formal education.

Attention was also given to Sri Lanka’s education system to date, the various education reforms implemented over the years, and the social changes brought about by those reforms. The President instructed officials to review previous education reforms and to take into account the key lessons emerging from them when formulating the new education policy framework.

Members of the Education Commission noted that, since the establishment of the National Education Commission in 1991, education policies have been formulated from time to time. They pointed out that a significant portion of the 1997 policy had been applied to primary education.

It was further observed that although a policy was formulated in 2016 for general education, it was not implemented accordingly. Likewise, while an education policy was prepared in 2023, it was not adopted as the national education policy. Attention was also drawn to the fact that previous education reform efforts had often been based on programmes developed according to the functions of education-related institutions, rather than on a clearly established policy framework guiding educational change.

Describing the present moment as a significant opportunity, the President emphasised that education reforms should be implemented in a manner that does not disrupt the continuity of the existing education process. Rather than creating a separate policy framework and attempting to operate independently through it, reforms should be integrated carefully into the functioning education system.

The President stated that this represents a considerable challenge for the National Education Commission. He also noted that it would be inaccurate to conclude that either the previous education system or the current one is entirely successful or entirely unsuccessful.

He stressed the importance of carefully identifying both the strengths and weaknesses of the existing system. He further observed that it is not possible to determine in the short term whether an education reform is successful or unsuccessful, as its impact must be assessed over the long term through the changes it brings about in society. For this reason, he emphasised that education reforms require greater caution and consideration than many other types of reforms.

Discussions also focused on the need to conduct an in-depth review of anticipated future social challenges and to incorporate into the new policy framework the elements necessary for developing citizens suited to a changing society.

Special attention was given to the need for a policy framework to regulate all sectors of education that are currently not subject to proper regulation, as well as to the adverse consequences arising from the lack of regulation of private education.

The importance of conducting research into university education reform and the regulation of private universities was also discussed.

Among those present were Prime Minister Dr Harini Amarasuriya, Deputy Minister of Education and Higher Education Dr Madhura Seneviratne, Deputy Minister of Vocational Education Nalin Hewage, Secretary to the President Dr Nandika Sanath Kumanayake, Senior Additional Secretary to the President Kapila Janaka Bandara, Secretary to the Ministry of Education, Higher Education and Vocational Education Nalaka Kaluwewa, Chairman of the National Education Commission Professor A. Sarath Ananda, and other members of the National Education Commission.

(PMD)

Business

Committee appointed for restructuring SriLankan Airlines

Published

11 hours ago

2026/06/12

Priyan

The Cabinet of Ministers has approved the appointment of a Committee, chaired by Senior Presidential Advisor on Digital Economy Dr. Hans Wijayasuriya, to conduct a strategic review and restructuring of SriLankan Airlines.

The other members of the committee are as follows:

• Senior Presidential Economic Advisor Duminda Hulangamuwa

• Financial and corporate strategy expert Deshal De Mel

• Transaction and investment banking, mergers and acquisitions expert Dumith Fernando

• The Secretary to the Ministry of Finance or his Representative

• The Secretary to the Ministry of Transport, Highways and Urban Development / a representative of the Civil Aviation Authority

• The Chairman of SriLankan Airlines

• Legal experts with specialised knowledge in corporate, aviation and public law

• Aviation industry experts to be appointed

The Government has recognised the urgent priority of undertaking a comprehensive strategic review of SriLankan Airlines, taking into account the broader macroeconomic context.

The main objective of this exercise is to establish a financially sustainable and commercially efficient national carrier, while reducing the long-term fiscal burden on the Government.

Accordingly, it has been deemed appropriate to establish a dedicated committee to carry out the strategic review and restructuring process in collaboration with the International Finance Corporation (IFC), which is serving as the Transaction Advisor.

The committee will be responsible for:

• Conducting an independent review and assessment of the airline’s strategic direction and future course of action

• Recommending restructuring requirements and possible restructuring models

• Evaluating specific strategic options and identifying the most suitable course of action aligned with the Government’s overall objectives

• Providing oversight, guidance and support for the implementation of the selected strategy and execution framework determined by the Government

The committee will function for the duration of the strategic review and restructuring process, or until it is formally dissolved by the Government of Sri Lanka.

(PMD)