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CB points out double edge of low interest rates

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While low interest rates have helped revive credit and contributed to improving the overall business sentiment, they could also disproportionately hurt savers, the Central Bank said in its ‘Policy Agenda for 2025 and Beyond’, which was launched on Wednesday (08).

However, unlike during the high inflation episode, real returns on deposits have been positive, with inflation successfully being reined into low levels, CBSL said. Interest rates have their cycles, and the Central Bank will manoeuvre interest rates to ensure that inflation is kept low and stable with a view to promoting overall public welfare, the Bank said.

“Amidst these developments, to ensure that domestic savings are promoted in a low interest rate environment, the financial industry is encouraged to introduce innovative solutions and products to promote savings in the context of the rapidly ageing population, while also embedding elements of liquidity and safety to compensate for interest rate volatilities during business cycles. Moreover, the culture of saving at an earlier stage of life should be nurtured, which will not only promote long-term savings but will also ensure greater financial security for a better life after retirement,” the policy statement said.

The Central Bank follows a forward-looking, data-driven approach to monetary policy formulation.

“Domestic money market liquidity is likely to increase gradually in 2025 with the expected buildup of foreign reserves, and the Central Bank will stand ready to manage liquidity, through appropriate monetary operations. Meanwhile, the Central Bank will explore ways to gradually phase out its holding of restructured bonds, a legacy of the Central Bank’s financial support to the Government during the crisis,” CBSL said.

The CBSL said: “The near completion of the Government’s external debt restructuring, coupled with the significant progress made under the IMF-EFF programmer, has created a solid foundation for boosting investor confidence and ensuring the stability of the external sector. In this regard, the Central Bank will closely observe the developments and risks on the external front to advocate appropriate policies promptly.

“Sri Lanka has been able to record a current account surplus continuously for two years, in 2023 and 2024. However, as economic activity picks up, the external current account is likely to record a deficit in 2025. Sri Lanka needs to maintain the external current account at sustainable levels over the medium term. A gradual recovery in import expenditure is expected, particularly in the context of the planned relaxation of vehicle import restrictions in 2025 by the Government. Furthermore, the external current account will be supported by inflows from the services trade and workers’ remittances, which together are expected to reach historically high levels.

“The journey towards ensuring long-term stability in the external sector will be essentially built upon the ongoing IMF-EFF programme to ensure the implementation of reforms and promote overall macroeconomic stability. The Central Bank will continue to strive towards the key commitment of rebuilding external buffers under the programme by purchasing forex from the foreign exchange market. Such buildup of external buffers needs to be facilitated by sufficient foreign exchange inflows to the country by way of enhanced earnings from merchandise and services exports, workers’ remittances, and foreign direct investment. Further, with the objective of expanding reserve management activities, the Central Bank intends to capitalize market opportunities through various diversification strategies across the markets, such as establishing a new investment tranche with advanced portfolio management strategies. Due attention will be given to strengthening risk mitigating aspects to ensure the safety of invested foreign reserves.”



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“Investments in Professional Education Are Investments in Institutional Strength and National Progress” – PM

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Prime Minister Dr. Harini Amarasuriya stated that strengthening Sri Lanka’s professional education framework and aligning it with internationally recognised standards is essential to building a skilled, ethical, and globally competitive workforce.

The Prime Minister made these remarks while addressing the official launch of the QS-accredited Chartered Qualification in Human Resource Management (CQHRM) at SCQF Level 11 (New Syllabus), organised by the Chartered Institute of Personnel Management (CIPM) Sri Lanka under the theme New Heights of Recognition. The event was held on Wednesday, 18 February at the Cinnamon Life, Colombo.

Emphasising the importance of expanding professional and vocational education pathways, the Prime Minister stated:

“This is of crucial importance to us in broadening our educational pathways and opportunities. We need to increase access to education that is globally recognised and that offers multiple pathways in professional and vocational fields. This aligns closely with the reform process we have initiated in the education sector and with our commitment to lifelong learning where individuals can work and learn at the same time, and where education is not limited to a particular age group but continues throughout life.”

Highlighting Sri Lanka’s national priorities, the Prime Minister further observed:

“At a time when Sri Lanka is focused on economic recovery, institutional reform and sustainable growth, the need for competent and ethical human resource leadership is clear. A competitive economy depends not only on investment and infrastructure but also on skilled professionals who can lead institutions effectively.”

The Prime Minister noted that the QS accreditation of the CQHRM qualification strengthens international recognition of Sri Lankan human resource professionals, enhances professional progression pathways, and reinforces confidence in the country’s professional education system. She also underscored the role of human resource leadership in advancing equity and inclusion within workplaces, including fair recruitment practices, safe working environments, leadership development for women, and inclusive policies for persons with disabilities and neurodivergent individuals.

Addressing the future of work, the Prime Minister stressed the importance of preparing for rapid technological transformation, including the growing impact of artificial intelligence on industries and workforce management, encouraging institutions to proactively adapt to emerging demands.

The event was attended by Deputy Minister of Industry and Entrepreneurship Development, Chathuranga Abeysinghe, along with other distinguished guests.

[Prime Minister’s Media Division]

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Advisory for Severe Lightning issued to the Western and Sabaragamuwa provinces and Nuwara-Eliya, Galle and Matara districts

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Advisory for Severe Lightning
Issued by the Natural Hazards Early Warning Centre  at 12.00 noon 19 February 2026 valid for the period until 11.00 p.m. 19 February 2026

The public are warned that thundershowers accompanied with severe lightning are likely to occur at some places in in the Western and Sabaragamuwa provinces and in Nuwara-Eliya, Galle and Matara districts after 2.00 p.m.

There may be temporary localized strong winds during thundershowers.

General public is kindly requested to take adequate precautions to minimize damages caused by lightning activity.

ACTION REQUIRED:

The Department of Meteorology advises that people should:
 Seek shelter, preferably indoors and never under trees.
 Avoid open areas such as paddy fields, tea plantations and open water bodies during thunderstorms.
 Avoid using wired telephones and connected electric appliances during thunderstorms.
 Avoid using open vehicles, such as bicycles, tractors and boats etc.
 Beware of fallen trees and power lines.
 For emergency assistance contact the local disaster management authorities.

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Navy and Coast Guard seize 04 Indian fishing vessels poaching in Sri Lankan waters

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During operations conducted in the dark hours of 18 Feb 26, the Sri Lanka Navy and Coast Guard seized 04 Indian fishing boats and apprehended 22 Indian fishermen, while they were poaching in Sri Lankan waters north of Mannar and off the Delft Island, Jaffna.

Recognizing the detrimental effects of poaching on marine resources and the livelihoods of local fishing communities, the Sri Lanka Navy and Coast Guard continue to conduct regular operations as proactive measures to deter such activities. These efforts underscore the collective robust approach and steadfast commitment to safeguarding the nation’s marine ecosystems while ensuring the economic security and wellbeing of its citizens.

The 02 fishing boats along with the 10 fishermen held in Mannar were handed over to the Fisheries Inspector of Mannar and the remaining 02 fishing boats intercepted off the Delft Island, together with 12 Indian fishermen were handed over to the Fisheries Inspector of Myliddy for onward legal proceedings.

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