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CB eases monetary conditions by reducing its interest rates

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The Monetary Board of the Central Bank has decided to reduce the Standing Deposit Facility Rate and the Standing Lending Facility Rate by 200 basis points to 11.00 percent and 12.00 percent respectively.The Central Bank said it took this decision at the monetary board meeting conducted on Wednesday.

The board arrived at this decision following a careful analysis of the current and expected developments, including the faster-than-envisaged disinflation process and benign inflation expectations in the domestic economy, with the aim of enabling the economy to reach its potential and stabilizing inflation at mid-single-digit levels in the medium term, while easing pressures in the financial markets, the Central Bank statement said.

The board expects that with this reduction of policy interest rates by 200 basis points, and the reduction of policy interest rates by 250 basis points in early June 2023, along with the significant reduction of risk premia on government securities witnessed recently, the market interest rates, particularly lending rates, will adjust downwards adequately and swiftly, said the central bank.

Therefore, the banking and financial sector is urged to pass on the benefits of this significant easing of monetary policy by the central bank to individuals and businesses, thereby supporting economic activity to rebound in the period, the statement said.

The CBSL said Colombo Consumer Price Index (CCPI) (2021=100) based headline inflation (year-on-year) decelerated further in June 2023 to 12.0 per cent, reflecting easing price pressures across many categories, including energy and food prices, along with the favourable base effect.

CCPI based food inflation (year-on-year) and core inflation (year-on-year), which reflects underlying inflation, moderated to single digit levels in June 2023, reinforcing the disinflation process. The full pass through of the appreciation of the Sri Lanka rupee against the US dollar thus far in 2023 is yet to be reflected in the price levels, a factor that could further support the disinflation process.

As per the latest projections of the Central Bank, headline inflation is expected to decelerate further and reach single digit levels by early Q3-2023 and stabilise around mid-single digit levels over the medium term, the CBSL said.

The ongoing disinflation process is supported by the lagged impact of tight monetary and fiscal policies, the expected softening of energy and food prices and their spillover effects, and possible repricing of goods and services due to exchange rate appreciation, alongside the favourable impact of the statistical base effect, CBSL said.

CBSL added that domestic economic activity is expected to recover gradually towards late 2023 and sustain the recovery, thereby helping to reach the potential level of economic growth over the medium term.

As per the GDP estimates published by the Department of Census and Statistics (DCS), the real economy contracted in Q1-2023, driven by a substantial contraction in Manufacturing and Services sectors. According to the leading indicators, economic activity is estimated to have remained subdued in Q2-2023 as well, reflecting the protracted impact of the economic distress in 2022 coupled with the tighter monetary and fiscal policies implemented to bring in greater macroeconomic stability.

However, the economy is projected to recover gradually towards late 2023, supported by policy normalisation led by the easing of monetary conditions, improvements in supply conditions supported by strengthened foreign exchange liquidity, the gradual relaxation of import restrictions, enhancement in business and investor sentiment, and the impact of policy measures and structural reforms being implemented to promote economic growth.

This recovery is expected to sustain, thereby gradually closing the large negative output gap that exists in the economy and reaching the potential level of economic growth over the medium term.



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“We welcome investors and tourists visiting Sri Lanka who contribute to strengthening economic and cultural ties”– PM

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Prime Minister Dr. Harini Amarasuriya stated that as Sri Lanka moves towards sustainable growth, the country welcomes investors and tourists who contribute to strengthening economic and cultural ties.

She made these remarks while addressing a special celebration and dinner reception organized by the Sri Lanka India Society to commemorate the 77th Republic Day of India and the 78th Independence Day of Sri Lanka, held on Thursday [February 26] at the Taj Samudra Hotel in Colombo.

During the event, the official magazine of the Sri Lanka India Society was launched, and the book “Port of Call” was presented to the Prime Minister and the Indian High Commissioner.

Addressing the gathering, Prime Minister Dr. Harini Amarasuriya noted that the Sri Lanka India Society since its establishment in 1949 has contributed to strengthening relations between the two nations,  through cultural engagement, dialogue, and sustained interaction. The Society has supported ties not only between the two governments but also between the peoples of both countries.

She further stated,

“Over the past year, the strength of India–Sri Lanka bilateral relations has been evident. I express gratitude for the support extended by the Indian government in facilitating the exposition of the sacred Devnimori relics in Sri Lanka.

When Cyclone Dithva affected Sri Lanka, India responded promptly through “Operation Sagar Bandhu,” providing assistance in the rescue and relief efforts.

I appreciated the announcement of a long-term relief package amounting to USD 454 million in support of Sri Lanka’s recovery efforts. India continues to work closely with Sri Lanka in its journey towards sustainable development.

The Sri Lanka–India partnership spans multiple sectors, including economic development, energy, connectivity, trade and investment, digital transformation, health, education, maritime security, and people-to-people ties.

As Sri Lanka progresses towards sustainable growth, we welcome increased investments from Indian businesses and greater tourist arrivals from India, while further strengthening our economic and cultural ties”.

She reaffirmed that India is Sri Lanka’s closest neighbour and an important partner,  Sri Lanka is committed to advancing cooperation for the benefit of the people of both countries and the wider region.

Speaking at the event, Indian High Commissioner Santosh Jha stated that the relationship between the two countries goes beyond formal diplomacy and is a strong and special partnership. He noted that the introduction of the first international degree offered outside India in Sri Lanka marked a new chapter in educational cooperation. He also highlighted the continued expansion of collaboration in connectivity and people-to-people relations, adding that India–Sri Lanka relations are experiencing significant growth in the current period.

The event was attended by ambassadors, diplomats, officials of the Indian High Commission, and government representatives.

[Prime Minister’s Media Division]

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Chief Sanghanayaka of Sabaragamuwa Province felicitated

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The “Gauravabhinandana” ceremonial felicitation was held in honour of the Chief Sanghanayake of the Sabaragamuwa Province of the Malwathu Maha Vihara Chapter of the Maha Vihara tradition of the Siyamopali Maha Nikaya; former Pirivena Examiner; Rajakiya Pandith; holder of Master; Scholar of classical texts; recipient of the Kala Bhushana title; Vinaya Keerthi Sri Dhammdinna Saranapala; the Most Venerable Kaeligama Vijithananda Nayaka Thero on Wednesday [25th of February] at the auditorium of the Rathnapura District Secretariat

The event was organized under the patronage of the Anunayake of the Malwathu Chapter of the Siyamopali Maha Nikaya, Most Venerable Acharya Agga Maha Panditha Niyangoda Dharmakeerthi Sri Sangharakkhitha Vijithasiri Abhidhana Anunayake Thero.

The presentation of the symbolic casket to the Most Venerable Kaeligama Vijithananda Nayaka Thero took place with the participation of Prime Minister Dr. Harini Amarasuriya and the Governor of Sabaragamuwa Province, Ms. Champa Janaki Rajaratne.

Addressing the gathering, the Prime Minister stated:

“It is a privilege for me to participate in this felicitation ceremony held in appreciation of the religious and social service rendered by the Chief Sanghanayaka of the Sabaragamuwa Province, Most Venerable Kaeligama Vijithananda Nayaka Thera.

When we reflect on his life journey, it serves as a profound inspiration to us all. Having entered monastic life as a disciple of the Sabaragamuwa prelate, the late Most Venerable Kelle Sri Saranananda Thero, the Nayaka Thera has now rendered over five decades of distinguished service following higher ordination.

After obtaining a Bachelor of Arts degree from the Vidyodaya University, he devoted several decades as a Pirivena teacher and examiner, enlightening thousands of students. He has also authored numerous scholarly works. His classical literary contributions, especially for students of Pirivena education, are of exceptional value”.

The Prime Minister further recalled with gratitude the commitment shown by the Nayaka Thera, centred around the Ratnapura Mahawala Sri Dharmayathana, to uplift the spiritual and social well-being of the local community, and extended her wishes for good health and long life for the continuation of his invaluable service to the Buddha Sasana.

The occasion was also graced by the presence of Most Venerable Karagoda Uyangoda Maithreemurthi Thera, Supreme Mahanayaka of the Sri Lanka Amarapura Maha Sangha Sabha; the Anunayaka of the Sri Lanka Ramanna Maha Nikaya, Waleboda Gnanissara Thera; Lecturer of the University of Peradeniya and Deputy Registrar of the Malwathu Chapter, Panditha Mahawela Dhammakkhanda Rathanapala Thera; the Chief Sanghanayaka of Ratnapura and Uva Wellassa and former Vice-Chancellor of Uva Wellassa University, Bethgamuwa Dhammadinna Thera; along with members of the Maha Sangha. The occasion was also attended by the Minister of Buddhasasana, Religious and Cultural Affairs Sunil Senavi, Governor of Sabaragamuwa Province, Ms. Champa Janaki Rajaratne, Member of Parliament Shantha Padmakumara, former Members of Parliament A. A. Wijethunga and Janaka Wakkumbura, Ratnapura District Secretary Chinthana Udaya Nanayakkara, Basnayake Nilame of the Maha Saman Devalaya Ishan Sanka Mapitigama, Mayor of Ratnapura Indrajith Katugampala, and many other distinguished invitees.

[Prime Minister’s Media Division]

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Sajith raises fresh concerns over toxic pollutants emanating from burning of substandard coal

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Sajith

 Opposition and SJB Leader Sajith Premadasa yesterday raised serious concerns over the Government’s importation of substandard coal, warning that its use has resulted in inefficient electricity generation, increased equipment damage and significant financial losses to the State and consumers.

In a video statement, the Opposition Leader said the SJB had exposed details regarding the importation of inferior-quality coal, prompting what he described as an admission by Government representatives that the coal in question was of poor standard.

Premadasa charged that the continued use of such coal has reduced generation efficiency at the Norochcholai Power Station, while increasing the likelihood of damage to critical equipment.

He further claimed that ash content had risen sharply, from the accepted 11–15 percent range, to over 21 percent, doubling the volume of toxic pollutants generated. The disposal of the excess ash, he said, poses additional environmental risks.

The Opposition Leader also noted that a further 15 to 16 coal shipments are expected to arrive within the next two to three months. However, he alleged that the failure to procure high-quality coal has reduced megawatt output, necessitating greater reliance on fuel-powered plants to bridge the shortfall.

“This results in financial losses to the country, the Government, and, ultimately, to electricity consumers,” he said.

Premadasa cited Section 30 of the Electricity Act of 2009, maintaining that consumer tariffs can only be imposed, based on efficient electricity generation. He urged the Public Utilities Commission of Sri Lanka to safeguard the rights of the country’s 7.5 million electricity consumers, insisting that losses stemming from inefficient generation cannot lawfully be passed on to the public.

He further alleged that the Government’s promised “system change” had, instead, resulted in questionable coal procurement deals. The financial losses incurred through, what he termed, corrupt transactions, he argued, could have been channelled into essential public services, such as education, healthcare, poverty relief and support for entrepreneurs.

Premadasa called not for the appointment of a committee of experts, but for a full forensic audit into the transactions surrounding the coal imports.

He stressed that the SJB would continue to stand in defence of electricity consumers and asserted that the President and Cabinet must accept responsibility for the damage allegedly caused to the Norochcholai power plant, which, he described, as a national asset.

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