Business

Cabraal and Central Bank responds to debt default fears

Published

5 years ago

2021/02/28

Recent commentary on Sri Lanka’s credit outlook ignores the numerous policy initiatives of the Government of Sri Lanka, which have already started yielding results

The Government of Sri Lanka observes that the concerns expressed in the media in reference to recent reports on Sri Lanka’s ability to service its debt obligations by international banks are one sided, and do not take into consideration the numerous of policy measures that have been introduced to revive the economy and ensure macroeconomic stability. These innovative policy measures are not restricted to traditional debt-based solutions to service the current debt obligations. Measures to build resources through non-debt solutions, the preservation of foreign currency resources and the gradual phasing down of the relative share of foreign debt are already yielding desired results, with a high likelihood of harnessing further improvements during the remainder of the year and beyond.

Certain media reports published recently attempts to raise concerns about Sri Lanka’s ability to honour its debt service obligations, based on backward looking and linear assumptions, thus ignoring the expected outcome of the novel policy regime currently in place. While gross official reserves have moderated somewhat since end December 2020, such moderation is not expected to continue. When all relevant facts are considered, it becomes apparent that the fears raised in certain reports are, in fact, merely hypothetical. The Sri Lankan economy, which is over US dollars 80 billion, has major natural and regular sources of foreign exchange inflows, including merchandise and services exports, workers’ remittances, programme and project related inflows, equity investment, and other financial flows. Aided by the post-COVID revival of the economy, such foreign exchange inflows are projected at US dollars 32 billion in 2021, even without major forms of borrowings, such as floating International Sovereign Bonds (ISBs). These projected inflows are expected to increase by about US dollars 2-3 billion annually in the period ahead with the support of well targeted policies and strategies of the Government. At the same time, authorities will continue to take measures to build up official reserves with the help of measures already implemented and further measures as necessary in the period ahead. It is noteworthy that the Government has launched a major drive towards promoting real inflows of foreign exchange through actively facilitating various merchandise and services exports, in both traditional and non-traditional sectors. The import curtailment measures and the steady recovery in export earnings would continue to improve liquidity in the domestic foreign exchange market. Further, envisaged equity investment flows through the Colombo Port City and Industrial Zones and the reprioritisation of project financing would help reduce the share of foreign debt notably in the period ahead, thereby dispelling concerns about debt sustainability.

In this context, settling the maturing ISBs of US dollars 1.0-1.5 billion, per year, over the medium term, need not be viewed as a major source of concern, given the entire stock of outstanding ISBs account for only 16.7 per cent of Sri Lanka’s total government debt as of end February 2021. It is also stressed that lenders in the majority of 83.3 per cent of the debt stock have raised no concern whatsoever about Sri Lanka’s ability to honour debt obligations. The authorities remain committed to honoring all upcoming debt obligations, leaving zero probability of any form of default on any obligation, which would jeopardise the longstanding relations with stakeholders and the impeccable credit history of the country.

The engagement with the International Monetary Fund (IMF) continues at staff level and as a member state in technical exchanges of know-how. Exploration of liquidity facilitation arrangements with regional central banks is also continuing, with some discussions are at an advanced stage.

As indicated in the Budget 2021, the Government has adopted a novel approach in relation to foreign financing, while enhancing the effectiveness of already secured financing channels, aimed at reducing the share of foreign financing of the budget deficit over the medium term. Reflecting the impact of measures already put in place by the Government, the relative share of outstanding external debt has already declined notably. The Government aims to reduce its external debt over the medium term to around a third of the total debt, and already the share of external debt has declined to around 40 per cent by end 2020 from over 48 per cent at end 2019.

The measures introduced to manage non-essential imports helped ease trade deficit to USD 5,978 million in 2020 from USD 7,997 million in 2019. The trade deficit is further expected to shrink in 2021 to around USD 4 billion. Export facilitation is expected to continue through allowing intermediate goods imports unhindered and promoting domestic value chain improvements, which would result in export earnings of about USD 13 billion in 2021.

Additionally, despite the projections of downturn in workers’ remittances, Sri Lanka recorded an increase of over USD 400 million remittances in 2020 with an aggregate of USD 7.1 billion. The policy measures to further incentivise remittances flows were facilitated with the Budget 2021 announcement of an additional Rs. 2 for conversion of per USD remittance, and the banks were required to sell 10 per cent of such remittance conversion to the Central Bank. The Central Bank has already commenced such absorption of conversions into its foreign exchange reserve. Further arrangements to improve foreign currency liquidity have been introduced, including a mandatory conversion of ¼ of export proceeds.

The Government is also in the process of channeling in official credit sources, with priority being envisaged for policy loans with a significantly high liquidity component. In addition, the commercial external financing component of the already lined-up term financing facility and other market financing components are envisaged in line with Budget 2021.

Sri Lanka Development Bonds (SLDBs) and loans of Overseas Banking Units (OBUs) also remain sources of foreign currency financing mainly from domestic foreign currency earning entities. The recently introduced measures to entice foreign investors to the government securities market and the real economy through an attractive foreign exchange swap arrangement are also likely to help enhance foreign currency inflows in the near term.

Real investment flows to the country remain a promising source based on the Colombo Port City related developments. The land reclamation work had been completed and the required legislation is being finalised. In December 2020, the Sri Lankan conglomerate, LOLC Group, signed an agreement with the Port City developers for a Mixed Development Project valued at USD 1 billion, which is set to break ground in mid-2021.

In this context, the Government reiterates its utmost commitment on meeting its external debt obligations, which will be facilitated not only through direct and indirect financing arrangements but also through highlighted policy measures and the current work plan to increase non-debt creating forex inflows.

The Government wishes to reiterate that even in the midst of various concerns raised by many parties on Sri Lanka’s debt service capability at the height of the COVID-19 pandemic, the Government was able to service its total external debt of around USD 4.3 billion in 2020.

The recent research reports indicate different figures of external debt obligations for 2021. The external debt obligations of the Government for 2021 amount to around USD 3.7 billion including the amortisation payments of USD 2.5 billion. Of this amount, thus far in 2021, the Government has settled over USD 500 million.

Sri Lanka will engage freely with all its investment and development partners and implement the envisaged measures to build up reserves through non-debt creating inflows while reviewing closely the international capital market developments.

Investors are invited to approach the Sri Lankan policy authorities at the highest levels who always remain open for constructive dialogue and will welcome any one-on-one engagement or roadshow discussions, without being dissuaded by premature one-sided opinion expressed without factoring the ground realities and the actual outcomes of policy measures introduced by the Government of Sri Lanka.

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Business

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

Published

11 hours ago

2026/03/29

Thilina Walpola

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.

Business

Police engagement supports wildlife protection in hill country

Published

11 hours ago

2026/03/29

Thilina Walpola

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.

Business

Mangala Tex marks expansion with new Kurunegala Branch

Published

11 hours ago

2026/03/29

Thilina Walpola

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