Business
The Central Bank of Sri Lanka maintains policy interest rates at their current levels
Monetary Policy Review: No. 08 – November 2021
The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 24 November 2021, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 5.00 per cent and 6.00 per cent, respectively. The Board arrived at this decision after carefully considering the macroeconomic conditions and expected developments on the domestic and global fronts. The Board noted the recent acceleration of inflation, driven mainly by supply disruptions and the surge in global commodity prices, and reiterated its commitment to maintaining inflation at the targeted levels over the medium term with appropriate measures, while supporting the economy to reach its potential in the period ahead.
The Sri Lankan economy is gradually recovering The Sri Lankan economy witnessed a strong recovery during the first half of 2021, supported by fiscal and monetary stimulus measures. The re-emergence of the COVID-19 pandemic and the resultant disturbances to production activities appear to have affected the ongoing recovery somewhat during the third quarter of 2021. However, the available high frequency indicators suggest that economic activity is fast returning to normalcy. The removal of COVID-19 related lockdown measures in October 2021 and the successful nationwide COVID-19 vaccine rollout would help activity in the period ahead. While real GDP growth is projected at around 5 per cent in 2021, the ongoing rise in COVID-19 infections both globally and domestically could impact this expectation to some extent.
The external sector remains resilient against strong headwinds Earnings from merchandise exports remained robust, recording over US dollars 1 billion for the fourth consecutive month in September 2021. Preliminary data show that merchandise exports have recorded an all time high in October 2021. Expenditure on imports also increased, widening the trade deficit during the nine months ending September 2021 over the corresponding period of the previous year.
The tourism sector has displayed strong signs of revival with the easing of restrictions. Despite subdued inflows on account of workers’ remittances in recent months, a rebound is expected in the period ahead with the continuous rise in worker migration and efforts taken to facilitate remittance flows through formal channels.
The depreciation of the Sri Lanka rupee against the US dollar is recorded at 7.2 per cent thus far in 2021. The exchange rate has remained stable at around Rs.200-203 levels against the US dollar during the past three months. Meanwhile, gross official reserves were estimated at US dollars 2.3 billion by end October 2021. This, however, does not include the bilateral currency swap facility with the People’s Bank of China (PBoC) of CNY 10 billion (equivalent to approximately US dollars 1.5 billion). Moreover, measures taken by the Government and the Central Bank to attract fresh forex inflows, as well as the anticipated inflows to the private sector, including the financial sector, are expected to augment gross official reserves, thereby strengthening the external sector in the period ahead. Specifically, a greater conversion of export proceeds is observed, while negotiations with the foreign counterparts of the Government and the Central Bank are progressing, broadly in line with the path envisaged in the Six-Month Road Map.
Market interest rates have increased, reflecting the passthrough of tight monetary conditions In response to the tight monetary and liquidity conditions, most market lending rates have adjusted upwards. Yields on government securities, which increased notably, have stabilised with enhanced subscriptions at primary auctions, reflecting improved market sentiments. Meanwhile, credit extended to the private sector, which expanded notably underpinned by eased monetary conditions, has slowed somewhat in September 2021.
However, data for the nine months ending September 2021 indicate that credit flows, particularly to the industry and services sectors of the economy, have improved significantly, thereby supporting the revival of the economy. In the meantime, credit obtained by the public sector from the banking system, particularly net credit to the Government, continued to expand. Overall, the growth of broad money (M2b) decelerated in September 2021, commensurate with the moderation of credit to the private sector and the decline in the net foreign assets of the banking system.
Inflation accelerated recently mainly due to supply side disturbances and the surge in commodity prices internationally Supply side disruptions, removal of domestic price controls and upward adjustments to several administratively determined prices to reflect the rising global energy and other commodity prices along with the gradual firming of aggregate demand conditions, have pushed inflation above the targeted levels recently. A further acceleration of headline inflation is possible in the immediate future, although such movements are expected to be transitory. The monetary policy measures already taken by the Central Bank will help curbing excessive demand pressures and preventing the buildup of adverse inflation expectations.
Policy rates are maintained
at current levels
In consideration of the current and expected macroeconomic developments as highlighted above, the Monetary Board was of the view that the current policy interest rates are appropriate. Nevertheless, the Central Bank will remain vigilant and continue monitoring domestic and global macroeconomic and financial market developments and will take appropriate measures, as and when necessary, with the aim of ensuring stability in the external sector, maintaining inflation in the desired range, and supporting sustained economic recovery.

Business
Priority areas for deepening Japan-SL economic ties
Japan Business Council (SLJBC) of The Ceylon Chamber of Commerce recently held its 47th AGM, with the Ambassador of Japan and the Patron of the Council, Akio ISOMATA, attending as the Chief Guest.
Addressing the gathering, Ambassador ISOMATA outlined three priorities for deepening bilateral economic relations: an effective and forward-looking trade and investment policy, the promotion of domestic industrial policy, and expanded investment in renewable energy. He noted that Sri Lanka’s ongoing review of its Free Trade Agreement policy would be important in shaping the country’s future negotiating landscape. He encouraged Sri Lanka to look Eastward toward Southeast Asia and Japan, proposing that the country adopt an export-oriented industrial model. The Ambassador welcomed the Government’s National Export Development Plan 2026 and National Mineral Policy 2026 as consistent with Japan’s vision of connecting Sri Lanka’s export-related manufacturing sectors with India’s high-growth manufacturing base.
In his address, President Athulla R F Edirisinghe reflected on nearly seven decades of humanitarian and development support extended by Japan to Sri Lanka, and paid tribute to the Chairman of the Sasakawa Peace Foundation Yohei Sasakawa, for his magnanimity in establishing the Foundation. Reflecting on the history of Japanese investment in the region from the 1970s onward, he observed that Sri Lanka had missed many opportunities to attract Japanese foreign direct investment. Highlighting the 2025 proposal for a Sri Lanka – Japan Economic Corridor by the Ministry of Economy, Trade, and Industry Japan, he called on Sri Lankan businesses, industry associations, and the wider community to come together in dialogue with the Government to ensure the country does not miss this opportunity as well.
2026/27 Committee: President: Athulla R F Edirisinghe – Director, Hirohama Ceylon (Pvt) Ltd, Senior Vice President – Ruwan Waidyaratne – Managing Director, Hayleys Advantis Ltd, Vice – President – Shamil Mendis – Managing Director, Spear International (Pvt) Ltd, Treasurer – Rohitha Mendis – Managing Director of Prudential Shipping Lines (Pte) Ltd, Immediate Past President – Mahen Kariyawasan – Managing Director, Andrew The Travel Company (Pvt) Ltd, representatives from Amano Lanka Engineering (Pvt) Ltd, BOV Capital (Pvt) Ltd, Brandix Apparel (Pvt) Ltd, Heritage Teas (Pvt) Ltd, Kalhari Enterprises (Pvt) Ltd, Lanka Harness (Pvt) Ltd, Dentsu Grant (Pvt) Ltd, MAC Holdings (Pvt) Ltd, and Vidullanka PLC. By invitation: HVA Foods PLC (subsidiary of George Steuart & Co), Spillburg Holdings (Pvt) Ltd, and Vaughan Chemicals (Pvt) Ltd.
The Sri Lanka – Japan Business Council plays an important role in promoting trade, tourism, and investments between Japan and Sri Lanka. For membership inquiries contact Kiyara at The Ceylon Chamber of Commerce via E-mail: businesscouncils1@chamber.lk or Tel.: 011 5588875/ 5588800.
Business
Rekawa turns turtle conservation into a 30-year community business model
By Ifham Nizam
What started 30 years ago as an effort to protect sea turtles has evolved into a community-based economic model that has generated livelihoods, attracted tourists and transformed Rekawa into one of Sri Lanka’s best-known nature tourism destinations.
The Rekawa Turtle Conservation Project, launched on September 2, 1996, by the Turtle Conservation Project (TCP) in partnership with the Department of Wildlife Conservation and the Rekawa community, marked its 30th anniversary last week, demonstrating how biodiversity protection can become an economic opportunity for communities living alongside sensitive natural resources.
Speaking at the anniversary celebrations, TCP chairman Thushan Kapurusinghe said the project currently provides direct livelihoods for 28 people, but its economic impact extends considerably beyond those directly employed by the programme.
‘Today, 28 people directly earn their livelihood through this project. But its impact goes far beyond those 28 individuals, Kapurusinghe said.
He pointed to the transformation of the area over the past three decades, arguing that the growth of tourism in the community has been closely linked to the turtle conservation programme.
‘If you travel from Netolpitiya to this area, you can clearly see how much the village has transformed over the years. There is no doubt that the growth of tourism in this community has been driven by the Turtle Conservation Project, he said.
The economic significance of Rekawa lies in its ability to convert the protection of a natural asset into a source of recurring community income.
Tourists do not come to Rekawa merely to see a beach. They come to witness sea turtles emerging from the ocean and nesting in their natural habitat—a tourism experience that depends directly on the continued protection of the nesting beach.
Kapurusinghe said tour operators regularly bring visitors to Rekawa, with some tourists traveling there after visiting major attractions such as the Kandy Esala Perahera.
The model represents a fundamental shift from viewing conservation as an expense to recognising biodiversity as an economic asset that can generate sustainable livelihoods when properly managed.
The 30th anniversary celebration at the Rekawa Turtle Conservation Project Information Centre brought together Southern Wildlife Region Director of the Department of Wildlife Conservation Channa Suraweera, government officials, conservation organisations, community representatives and long-standing supporters of the initiative.
Individuals who had contributed to the project over the past three decades were also recognised with awards for their service to sea turtle and environmental conservation.
Rekawa’s experience has attracted international attention because of precisely this combination of conservation and community development. The project has received international recognition as well as the Green Employment Award from the Ministry of Environment and Natural Resources. Earlier international recognition included a highly commended ‘Tourism for Tomorrow’ award, while the project’s turtle-watch programme subsequently received further recognition in responsible tourism and conservation.
Business
Ceylinco Life brings premium policyholders closer to the magic of the Kandy Perahera
For an evening, the timeless spectacle of the Kandy Esala Perahera unfolded at especially close quarters for a select group of Ceylinco Life’s most valued policyholders and their families, who were hosted to an exclusive viewing experience by the Company’s Customer Relations Division.
Held at the Ceylinco Life Kandy Branch on Kings Street, the annual event coincided with the second Randoli Perahera, bringing guests into the heart of one of Sri Lanka’s most spectacular expressions of culture, tradition and pageantry.
As the procession made its majestic passage through the streets of Kandy, guests enjoyed VIP seating at a prime vantage point, allowing them to experience the colour, movement and grandeur of the Perahera up close. The evening offered a fitting setting for Ceylinco Life to celebrate its enduring relationships with its premium clientele.
The experience extended well beyond the spectacle outside. Guests were welcomed with evening refreshments and an exclusive dinner buffet presented by the prestigious Amaya Hills Resort, adding a fine-dining dimension to an already memorable evening.
Families, too, were at the centre of the occasion. A private movie theatre experience provided entertainment for children and adults alike, while each attending family received a beautifully framed family photograph as a personalised souvenir, a tangible reminder of an evening shared together against the backdrop of one of Sri Lanka’s most treasured cultural traditions.
Besides being a much sought-after opportunity to watch the Perahera, the occasion was an expression of appreciation. Through its continuing Customer Relationship Management activities, Ceylinco Life seeks to create experiences that recognise its most valued policyholders not simply as customers, but as relationships to be celebrated and nurtured. And on this particular August evening, the enduring splendour of the Kandy Perahera provided the perfect setting for doing just that.
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