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Cabraal says Central Bank will guide markets
ECONOMYEXT – Sri Lanka’s central bank will guide markets and deploy monetary tools mindful of repercussions, and guide markets in turbulent times, newly appointed Central Bank Governor Nivard Cabraal said last week.
“The policy measures must be taken,” Cabraal told a forum of senior central bankers and finance officials after taking office as Governor for the second time on September 15.
“There are no short cuts. Sometimes there are tough policy measures to be taken.
“When we take policy measures there are always repercussions from another side. Sometimes if you do not take those policy measures you meander along.”
“When a tool is used, and one area is getting cured, it can emerge as a problem in another area,”
“It is not easy to manage this balance. You have to be conscious of all the outcomes that generally arise when you take certain policy measures.”
Cabraal who was previously central bank chief from 2006 to 2014 said the central bank hoped to guide markets.
“We would need to lead the economy in these measures,” he said. “That means we have to be always one step ahead, two steps ahead sometimes three steps ahead.
“I think we would from now onwards take the lead in providing guidance to markets as well as the economy.
“We have got to take that step clearly and boldly so that the market would be able to read the signs that the central bank is making so that would need to use that guidance particularly in turbulent times like what we having now.
“This is not the time to abrogate that leadership role.”
Cabraal said he expected to seek the views of market participants and also staff.
He said some people wanted advice from outsiders like the International Monetary Fund but there was a lot of knowledge within the bank.
“Once course of action is decided, it has to be steadfastly followed, he said.
Sri Lanka’s gross forex reserves are now down to 3.5 billion US dollars and net reserves depleted after record money printing not seen in the history of the soft-pegged central bank.
Central banks that print large volumes of money and lose reserves become helpless and market participants also become helpless as the newly injected liquidity creates forex shortages, hit the exchange rate and drives up asset prices.
When rate normalization is delayed and net foreign assets turn negative, a central bank itself can rapidly accumulate quasi fiscal losses and lose its ability to carry out policy, analysts say.
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Heat Index likely to increase up to ‘Caution level’ at some places in the Western, Sabaragamuwa, Southern and North-western provinces and in Monaragala and Mannar districts
Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre of the Department of Meteorology at 3.30 p.m. on 12 March 2026, valid for 13 March 2026.
Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at some places in Western, Sabaragamuwa, Southern and North-western provinces and in
Monaragala and Mannar districts.
The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.

Effect of the heat index on human body is mentioned in the above table and it is prepared on
the advice of the Ministry of Health and Indigenous Medical Services.
ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.
Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491.
News
Govt. bends rules, lowers coal standards in favour of errant company: FSP
The Frontline Socialist Party (FSP) yesterday accused the government of trying to award another tender to the Indian company that supplied low-grade coal to the Norochcholai Power Plant and failed to deliver the stipulated amount of coal according to schedule.
The allegation was made by the Education Secretary of the Progressive Socialist Party, Pubudu Jayagoda, during media briefing at the party office in Nugegoda last afternoon.
Jayagoda said that in September 2025, the government had awarded a tender to the Indian company Trident Chemphar to supply 25 coal shipments for electricity generation in 2026.
In August 2025, it was confirmed that the coal delivered by the company was substandard. The company also failed to supply coal on schedule. Although the first shipment was expected in the second week of December 2025, it arrived at the end of the month. By mid-March, only 12 ships had arrived, and biweekly deliveries have been disrupted, putting Sri Lanka at risk of a severe energy shortage.
On 11 March, the government called a sudden spot tender for five coal shipments. Four companies submitted bids, and they include Trident Chemphar. FSP criticiced awarding the tender to the same discredited company, saying it was unethical and could trigger a major national crisis, as the company had failed to supply quality coal reliably in the past.
Previously, coal quality was strictly measured, with a “Reject Value”. But now to help the errant supplier the term of Reject Value has now been omitted altogether and replaced with a new term ‘Minimum Value’ setting it as the minimum calorific threshold—coal producing less than 5,900 kilocalories per kilogram was rejected, and coal with ash content above 16% was also discarded.
However, the government is now reportedly lowering these standards, accepting substandard coal, and changing tender specifications to accommodate the company.
Jayagoda castigated the latest stunt coming especially at a time when the world faces war and oil shortages. Diesel meant for electricity generation is being diverted to school buses, public transport, and emergency vehicles, leaving households at risk of prolonged blackouts. Even if diesel is imported, electricity tariffs could skyrocket.
News
Lanka requests diesel from India
The Indian Ministry of External Affairs has said it is considering requests for diesel supplies from neighbouring countries, including Sri Lanka, Bangladesh and the Maldives.
Speaking to the Press Trust of India, Ministry Spokesperson Randhir Jaiswal noted that India was a major exporter of refined petroleum products in the region. He confirmed that Bangladesh had formally requested a diesel supply, which is currently under review.
He said that diesel exports to Bangladesh had largely continued since 2017, but any new allocations would take into account India’s refining capacity, domestic demand, and overall fuel availability.
Jaiswal added that similar requests from Sri Lanka and the Maldives were also being considered, with India’s own energy requirements forming a key part of the decision-making process.
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