Connect with us

News

Developers halt new condos after currency collapse, costs skyrocket

Published

on

ECONOMYNEXT –Sri Lanka’s condominium developers said they have halted new projects and building materials were skyrocketing with the collapsing rupee and import protection given to building material producers triggering a crisis in partially built apartments.

“At present no Developers are embarking on new Projects as budgeting even in the short term is impossible, the Condominium Association of Sri Lanka said in a statement.

“The stark reality though is that Developers with partially constructed properties and current Buyers [and] those who have paid deposits on “old pricing” will jointly face difficulty.

“On the one hand, exponentially increased costs preclude the adherence to previously quoted prices and on the other hand buyers facing unanticipated cost increases and hiked-up interest rates.”

Sri Lanka’s rupee collapsed and the country is trapped in the worst currency crisis in the history of the island’s Latin America style central bank.The rupee collapsed from 182 to 360 to the US dollar in the current cycle of printing money to suppress rates.

Monetary instability worsened and the central government, state enterprise and the central bank itself borrowed heavily abroad through seven years of ‘flexible inflation targeting’ with output gap targeting (printing money to boost growth) despite having a reserve collecting peg and defaulted in 2022.

Inflation officially has soared 67 percent in the year to June, with food prices doubling over two years.Price of steel has shot up 350 percent from 100,000 rupee a tonne in 2021 to 450,000 rupees now.Price of tiles has rocketed from 300 percent from 150 a square feet 600 rupees.Price of cement has increased from 800 rupees to 3100 rupees per 50kg bag or about 287 percent.Prices of some fittings are more than 500 percent the condominium developers association said.About 600,000 person are employed in the construction industry, the association said.

Central bank interest rates suppression and the resulting credit and mal-investment for output gap targeting usually hits the construction sector the hardest.Construction sector was also hit in the 2016 and 2018 interest rates suppression and currency collapse cycles, with most of the industry backing the then opposition.However the 2019 administration printed even more money and gave 7 percent loans to construction driving up imports which were financed with central bank reserves driving up imports and the interventions were sterilized leaving the banks with central bank borrowings and deteriorating loan to deposit ratios.Because reserves for imports are sterilized with re-purchased Treasury securities, ultimately monetization of budgets are blamed.

Sri Lanka has been going from one currency crises to another ever since a Latin America style central bank was set up in 1950 by US money doctor. Latin American central banks collapse default with budget surpluses.Sri Lanka’s intermediate regime central bank has taken the country to the International Monetary Fund 16 times so far. The country is now negotiating the 17 IMF deal along with debt re-structuring.



Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News

New prison regulations for monks serving jail terms soon: President’s Office

Published

on

President

The Presidential Secretariat (PS) yesterday said that prison regulations concerning Buddhist monks serving prison sentences were expected to be adopted within the next two weeks.

The PS said: “Once they come into effect, arrangements will be made for Buddhist monks to be taken outside prison in their robes, based on the recommendation of the relevant Nikaya or chapter.”

The process to amend prison regulations was initiated on 08 October following discussions between President Anura Kumara Dissanayake and the Maha Sangha. The President called the meeting amidst controversy over producing General Secretary of Bodu Bala Sena (BBS) Ven. Galagodaaththe Gnanasara in civilian attire in court.

A special five-member Committee was in the process of studying the current regulations and standing orders under the Prisons Ordinance, the PS said.

The Committee is chaired by Prince Senadheera, Secretary to the Ministry of Buddhasasana, Religious and Cultural Affairs. Its other members are Piyumanthi Peiris, Additional Secretary to the Ministry of Justice, Wasantha Ariyaratne, Additional Secretary to the Ministry of Public Administration, R. M. G. Senaratne, Commissioner-General of Buddhist Affairs, and A.C. Gajanayake, Commissioner-General of Prisons.

The first meeting of the special Committee was held at the Presidential Secretariat on the 9th, chaired by Prince Senadheera. Attorney-at-Law Harshana Nanayakkara, Minister of Justice and National Integration, provided the necessary policy guidance for the Committee’s work.

The proposals concerning Buddhist monks would be presented to the Maha Sangha by the middle of next week to obtain their views and recommendations before their implementation, PS stated.

Continue Reading

News

CP alleges NPP has taken the blame for illegal US sanctions on Iranian vessels

Published

on

Dr. G. Weerasinghe

The Communist Party of Sri Lanka (CPSL) has alleged that the ruling UNP, in a ridiculous bid to whitewash illegal US sanctions on Iranian oil carriers stranded off Sri Lanka, has taken on itself the blame for refusing to supply humanitarian aid to the trapped crews of the oil tankers.

The text of the statement issued by Dr. G. Weerasinghe,

General Secretary, CPSL: “The Communist Party of Sri Lanka condemns the attempts by the USA to prevent essential supplies of food and water to the 19-20 Iranian oil tankers stranded off the coast, which are running short of food, fuel, and fresh water. It urges the Government of Sri Lanka to face up to the criminal actions of the US Government and do its duty under international humanitarian law.

On 30 September 2026, the Wall Street Journal reported that US officials had threatened Sri Lanka with sanctions if it continued supplying the tankers. These tankers (stranded about 24 km off Sri Lanka, within the Exclusive Economic Zone) which already discharged their cargoes, are empty and unable to return to Iran owing to the illegal war being waged against that country by the USA and Israel.

In response to this report, on 4 October, Foreign Minister Vijitha Herath denied that Washington put pressure on the Government of Sri Lanka which, he claimed, always abides by international maritime law. However, he clarified that the Government would enforce US sanctions.

A US Embassy spokesman had earlier stated that Washington is working with allies to cut off “illicit Iranian revenue,” warning that supplying fuel, food, or provisions to sanctioned vessels could expose companies and individuals to US sanctions, including civil or criminal penalties.

Furthermore, from 9-11 September, the US Embassy in Colombo carried out a three-day maritime sanctions compliance workshop. Officers of the Sri Lanka Navy and Coastguard, as well as officials of the Ministry of Defence, Central Bank, Ports Authority and Merchant Shipping Secretariat, participated in this workshop. The officials were warned that any services (including fuel, food, or water) rendered to US-sanctioned vessels, such as the Iranian-linked tankers stranded off Sri Lanka’s coast, could expose companies and individuals to secondary sanctions, civil penalties, or criminal liability.

In fact, it is actions of the USA which are illicit. The US-imposed unilateral and secondary sanctions violate international law, sovereign equality, and the principle of non-intervention. Furthermore, the unprovoked US-Israeli aggression against Iran itself, which had shown no belligerent intent, is illegal in international law. Participation of government officers in the workshop itself is controversial.

According to unofficial reports, Sri Lanka’s national security establishment objected to the demands made by US officials and urged the government to lodge a protest with Washington, pointing out that under UNCLOS Article 98, SOLAS 1974, and the SAR Convention 1979, Sri Lanka is obligated to assist the crews.

However, the response of the National People’s Power (NPP) regime has been to attempt to whitewash the illegal actions of the USA and to take on itself the blame for refusing to supply humanitarian aid to the trapped crews of the oil tankers.

The pusillanimous behaviour of the NPP regime rips aside any pretence that it is in any way progressive or patriotic. Together with its major constituent, the Janatha Vimukthi Peramuna (JVP), it stands exposed as the handmaiden of US President Donald Trump’s reckless, warlike and imperialist foreign policy establishment. It begs the question whether the Government has signed secret war-related deals with the USA and thereby ditched Sri Lanka’s 70-year history of non-alignment.

The Communist Party of Sri Lanka, therefore, condemns these illegal attempts by the USA to prevent Sri Lanka from carrying out its humanitarian duty. It calls upon the Government of Sri Lanka to abide by international humanitarian law, work-out suitable strategies and to supply the stranded crews with essential supplies, including food and water. It also calls upon the Government to reveal any secret deals it has entered with the USA.”

Continue Reading

News

Ex-Tiger witness claims Ekneligoda proposed to fire missile at MR’s plane

Published

on

An ex-LTTE cadre Sumathipala Suresh Kumar, alias Thavendran ‘Murali’, has told a three-member bench of the Colombo High Court, hearing the disappearance of media personality Prageeth Ekneligoda, that during the war they discussed plans to assassinate President Mahinda Rajapaksa and a group of government people. The alleged meeting took place in Habarana.

The bench consisted of A.G.U.S. N. K. Seneviratne (Chairperson), Dr. Nalin Hewawasam and Lakmali Hewawasam.Kumar said so giving evidence as the fourth witness on behalf of first, second and sixth accused in this case.

Ekneligoda disappeared on the eve of 2010 January 26 presidential election.

Kumar told court that Ekneligoda proposed to fire a missile at an aircraft carrying President Rajapaksa and other top people. There had been another person, identified as Nadan, there.

Asked by the prosecution whether he served as a leader of LTTE intelligence at the time he met Ekneligoda, Kumar said that he was a prisoner at that time. The witness claimed that he had gone with the Army and it was his first visit to that place where the meeting took place.

When the prosecution proposed that what he said was not true, Kumar denied that.

The nine accused are Army officers and men, including Lieutenant Colonel Shammi Arjun Kumararatne. The others are R.M.P.K. Rajapaksa alias Nathan, W.V. Priyantha Dilanjan Upasena alias Suresh, Seneviratne Mudiyanselage Ravindra Rupasena alias Ranji, Yapa Mudiyanselage Chaminda Kumara Abeyratne, Seneviratne Mudiyanselage Kanishka Gunaratne, Aiyasami Balasubramaniyam, Dangaha Gamaralage Tharanga Prasad Gamage and T.E.R. Peiris.

The fourth witness surrendered to the Army in May 2009 and during investigations it transpired that he was used by Military Intelligence to contact Ekneligoda in a bid to ascertain his intention during the presidential polls campaign.

Continue Reading

Trending