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CB optimistic about controlling runaway inflation

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By Shyam Nuwan Ganewatta

Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe yesterday (19) said there was some political and social stability in the country and it would help the CBSL achieve some success in its endeavours.

Dr. Weerasinghe said so responding to a question posed by a journalist about the Governor’s earlier claim that he would resign from his post if political stability could not be restored within two weeks.

“Now, we have a Prime Minister. We have a cabinet. The Parliament is in session. We expect that a Finance Minister will be appointed soon. There is no violence now. Peaceful protests and demonstrations do not affect political and social stability. I think the country is on the right track. Most MPs have expressed a desire to work together. I think things will become more stable soon,” he said.

Inflation in Sri Lanka would decrease in the coming months due to the corrective policy measures of the Central Bank and the expected improvements in both domestic and global supply conditions, the Central Bank has said in a press release (19).

Inflation is projected to escalate in the near term on account of domestic supply shortages, increased global commodity prices, the effects of the large depreciation of the Sri Lanka rupee against the US dollar thus far during the year, along with the impact of aggregate demand pressures.

“However, this will change in the coming months and the bank expects that the recent tightening of monetary conditions and the strengthening of monetary policy communication will help anchor inflation expectations of the public in the period ahead.

“The Central Bank expects to minimize excessive volatility in the domestic foreign exchange market through tightening of the monetary policy stance, restrictions on imports on open account terms, and the reduction in the proportion of mandatory foreign exchange sales by the banks to the Central Bank.

“The Central Bank expects an increase in workers’ remittances due to the notable reduction in the gap between the official exchange rate and the rate offered by the grey market and the continued increase in migration of workers.

“The near term outlook of the tourism sector is likely to remain unfavourable due to both global and domestic factors.

“Meanwhile, gross official reserves as of end April 2022 were provisionally estimated at US dollars 1.8 billion, including the swap facility from the People’s Bank of China equivalent to around US dollars 1.5 billion, which is subject to conditionalities on usability.”

The Central Bank and the government have commenced technical level discussions with the International Monetary Fund aimed at working towards a programme to address the macroeconomic challenges faced by the economy while expeditious arrangements are being made to commence the external debt restructuring process.

“Negotiations have already begun with bilateral and multilateral partners to obtain bridging finance in order to secure foreign exchange required to finance imports of essential goods and strengthen the social safety net programmes.

“Economic activity is expected to be affected considerably by the ongoing supply shortages, energy related issues and social tensions, as reflected by several leading indicators. Demand management policies of the Central Bank and anticipated fiscal consolidation measures are also expected to keep aggregate demand subdued during the year.

“Global economic growth is also expected to moderate in response to the tightening of monetary policy by the central banks globally to counter inflationary pressures along with the spillover effects of the geopolitical tensions in Eastern Europe.

“After carefully considering the current and expected macroeconomic developments both globally and domestically, the Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 18 May 2022, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at the current levels of 13.50 per cent and 14.50 per cent, respectively.

“The Board was of the view that the policy measures that have already been implemented by the Central Bank would continue to be further transmitted to the financial markets, while some signs of tighter monetary policy are already being observed in real economic activity. The Central Bank would continue to monitor domestic and global macroeconomic and financial market developments and stand ready to take appropriate measures proactively to help reinforce greater macroeconomic stability in the economy in the period ahead.”

“In order to prevent further deterioration of economic conditions and complement the efforts of the Central Bank implemented thus far, urgent measures are required to restore greater political stability through consensus governance and social harmony.

“In addition, swift policy actions are required to strengthen the fiscal performance that would help avoid excessive reliance on monetary financing and maintain fiscal sustainability over the medium term. Furthermore, expeditious and transparent revision of tariffs in the energy sector remains a priority in order to strengthen the financial position of energy-related state owned business enterprises, while improving the efficiency of social welfare programmes to support the vulnerable groups of the society impacted by the unprecedented economic circumstances.”



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Senior England players to miss Sri Lanka T20Is for WPL 2027

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England are scheduled to play three T20Is and ODIs in Sri Lanka [Cricinfo]

Senior England players, including captain Nat Sciver Brunt, will be allowed to miss a three-match T20I series in Sri Lanka if their franchises qualify for the final stages of WPL 2027 in India.

Sri Lanka Cricket (SLC) announced dates for England’s tour on Wednesday, with the three T20Is in Pallekele scheduled from February 1 to 5 acting as preparation for the inaugural Women’s T20 Champions Trophy, which runs from February 14 to 28 in India. England will then return to Sri Lanka for three ODIs in Dambulla from March 4 to 8.

The WPL runs from January 14 to February 7, and Cricinfo has learned that the ECB will allow England players to fulfil their franchise commitments even if it means missing the Sri  Lanka T20Is. The approach is recognition that the WPL playoffs will provide players with good preparation for the Champions Trophy through high-stakes games in relevant conditions.

Sciver-Brunt (Mumbai Indians), Lauren Bell (Royal Challengers Bengaluru) and Sophie Ecclestone (UP Warriorz) have all been retained by their franchises for 2027. Only two English players – Sophia Dunkley and Kira Chathli – have entered next week’s auction, with the majority opting to prioritise the Sri Lanka series.

No Sri Lankan players are affected by the date clash as things stand, though captain Chamari Athapaththu and Mithali Ayodhya have both entered auction scheduled for October 28.

The ECB has previously allowed players to miss bilateral T20Is to play in the WPL, with four players – Ecclestone, Sciver-Brunt, Alice Capsey and Danni Wyatt-Hodge – arriving late for a series in New Zealand due to their participation in the 2024 edition.

The inaugural Women’s Champions Trophy was initially scheduled to be played in Sri Lanka in June-July 2027. The dates were moved forward earlier this year by the ICC, who then stripped Sri Lanka of hosting rights over government interference in their cricket administration and relocated the tournament to India.

England will also hold a red-ball training camp in India in January, selection for which will take place in the coming weeks.

The move follows head coach Charlotte Edwards’ appraisal at the end of the home summer, saying her side would need to intensify their focus on Test cricket after India thrashed them by 270 runs at Lord’s in July and with an Ashes series looming in the middle of next year.

“There will be a real focus on our red-ball cricket come December, January, February and leading into our English summer,” Edwards said at the time. “Expect potentially some of the players to be removed from county cricket. I’ll put that out there now because we’ve got a few best v best [planned].”

England Women tour to Sri Lanka

T20I series: February 1, 3, 5 (all Pallekele)
ODI series: March 4, 6, 8 (all Dambulla)

[Cricinfo]

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Low-quality coal causes power cuts: Ex-LECO Chief

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Chandrasekera

By Shamindra Ferdinando

The use of low quality coal, over a period of time, had led to the developing crisis at the Lakvijaya Coal Power Plant (LVPP) at Norochcholai that compelled the boastful NPP government to implement power cuts, former Lanka Electricity Company (Private) Limited (LECO) Chairman Bandula Chandrasekera said yesterday.

The government imposed one-hour countrywide power cuts on 19 Oct.

Chandrasekera, now a consumer rights activist, warned that though the government declared the power cuts would be limited to three days, the situation could take a turn for the worse.

The top United Republican Front (URF) activist said so in response to the government’s claim that Saturday’s sudden drop in electricity generation at the country’s only coal-fired power plant hadn’t been caused by the quality issue of coal.

The former LEOCO Chief emphasised that the country was paying a very heavy price for the controversial procurement of low-quality coal for the 2025/2026 season.

“Procurement of low quality coal is not an allegation. It has been accepted by a seven-member committee, headed by K. L. R. C. Wijayasinghe, Additional Secretary, Energy Ministry, appointed by Parliament,” Chandrasekera said, pointing out that the government was trying to mislead the public into believing that the use of coal supplied by Trident Chemphar wasn’t the cause of the current power crisis.

The expert committee that investigated the coal scam had disclosed losses caused by substandard coal, Chandrasekera said, adding that the total losses/damages could be as much as Rs 20 bn.

Trouble erupted in Dec, 2025 when LVPP began using coal purchased from the new supplier, whose selection was challenged by the Auditor General in a special report submitted to Parliament, in April this year, he said.

Since the government entered into a deal with the Indian company, LVPP has so far received 19 ship loads of coal. An investigation conducted on the orders of the Public Utilities Commission of Sri Lanka (PUCSL) revealed that the use of low-quality coal had had a detrimental impact on the LVPP.

The Frontline Socialist Party (FSP) exposed the corrupt deal in Sept. 2025. The NPP run Parliament ignored the disclosure made by the JVP breakaway faction.

Chandrasekera said that the Committee asserted that it would cost approximately Rs 80 mn to restore the LVPP to the previous status. Responding to The Island queries, Chandrasekera emphasised the country couldn’t meet the power requirement unless the LVPP operates without hindrance. Those who had been, for whatever reason, switched to South African coal provided by the Indian supplier should be held accountable and punished, Chandrasekera said, recalling how the NPP parliamentary group defeated the no-confidence motion moved against the then Power Minister Kumara Jayakody, who later quit, as the enormity of the scam and its repercussions shook the government.

Chandrasekera said that the government couldn’t maintain services though the powers that be intended to meet the power deficit with the help of hydropower generated by the Victoria power station. The ex-official underscored the need to inquire into the failure of the authorities to implement the backup plan last Saturday. Had Victoria met the requirement, last Saturday’s countrywide power failure, that lasted from 11.43 am to 11 pm could have been averted, Chandrasekera said.

He also questioned the controversial government decision to disconnect solar power over the weekend as the absence of solar generation obviously aggravated the problem. Chandrasekera emphasised that the latest countrywide power outage exposed the government whose basic strategy was to blame everything on the Opposition.

“We sincerely hope the Presidential Commission inquiring into the coal scams also looks into the situation developing at LVPP due to the use of substandard coal. According to him, the loss caused by the recent outage was estimated to be around Rs 16 bn and the crisis could not be addressed by propaganda campaigns, especially on social media. But, if other factors, including the expenditure on hydro and thermal generation were taken into consideration, the losses could be as much as Rs 20 bn.

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Power cuts continue

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Power cuts continued across the country yesterday and are expected to continue today following the shutdown of all three generating units at the Lakvijaya Power Plant in Norochcholai.

The Public Utilities Commission of Sri Lanka (PUCSL) said approval had been granted on Monday (19) following a request by the National System Operator (NSO) to impose scheduled power cuts.

Accordingly, one-hour power cuts were scheduled between 4.30 p.m. and 9.00 p.m., with the country divided into four zones. Hospitals and locations providing essential services were exempted.

The three Norochcholai generating units remain out of operation following the countrywide power failure last Saturday, prompting the NSO to introduce daily power cuts to manage the available electricity supply.

NSO Chief Executive Officer Buddhika Samarasekara said the power cuts would be necessary yesterday and today (21).

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