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Lanka awaits statement from external creditors

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CBSL Governor Dr. Nandalal Weerasinghe

By Sanath Nanayakkare

Central Bank Governor Dr. Nandalal Weerasinghe said in Colombo on Tuesday that the country would be awaiting an ‘important statement’ from its external creditors following a presentation made to them on Friday, laying out the full extent of the country’s economic crisis and plans for debt restructuring in the run-up to an International Monetary Fund bailout.

Earlier, the Finance Ministry said in a statement that the online call arranged by legal firm Clifford Chance on 23 Sept. would be open to all of Sri Lanka’s external creditors and be ‘an interactive session’ in which participants can ask questions.

“We have to obtain financial assurances collectively from our bilateral and other creditors that they are willing to support Sri Lanka in its debt restructuring process for the IMF Executive Board to start disbursing funds to Sri Lanka,” the Central Bank Governor said.

“That assurance is the next crucial step for us to get from our international creditors, friends and partners for us to be able to demonstrate that they will be supporting Sri Lanka in its debt restructuring plans and its IMF programme,” he said.

“That is what we are going to do from Friday onwards and we will be seeking that important statement from them. All our friendly countries have been helping at this difficult time. However, we need to lay out the restructuring plan in an open and transparent manner so that everyone will clearly see what they and what others are offered in the process. Hopefully they will give us that assurance and the sooner we get it the better. That’s the time-frame. A lot of people ask me how long it would take. I have to say that it depends on our international partners; as soon as they give us necessary financial assurances, the IMF can start disbursing the four-year extended fund facility to Sri Lanka. Then there will be a lot of investors as well as other valued partners such as the World Bank to enhance their support to Sri Lanka from that point onwards.

That I hope will be a crucial turning point for us to stabilize the economy.”

The Governor also pointed out that the people would have to go through a difficult period as the economy has contracted.

“We have had to manage our imports within our export incomes, and we also have to manage through way too high interest rates and slowing down of economic activities. These have to be dealt with while protecting the most affected vulnerable sections of the society, and in this context, others will have to bear some of the pain. That’s why we have had to take some difficult measures while ensuring the pain would not be too substantial. Once we get the assurances from our creditors for the restructuring plan and subsequently the approval from the Executive Board, I am very confident that we can stabilise the economy and we all can gradually get back to normal economic and business activities as we used to do in the past.”

Meanwhile, India said on Tuesday it had started bilateral discussions with Sri Lanka on restructuring Sri Lanka’s debt. The first round was held on Sept. 16 in a cordial atmosphere that showed India’s support for an early conclusion and approval of an International Monetary Fund loan programme for Sri Lanka.

Meanwhile a news report in The Hindu on Sept. 20 titled ‘China keeps Pakistan, Sri Lanka waiting on loan deals’ said: “While Japan and India have been very supportive of the IMF process from the beginning, all eyes are on China as to how it would react to debt restructuring with Sri Lanka”.

However, Beijing in response to Sri Lanka’s IMF agreement had earlier made a statement favorable to Colombo as a ‘traditional friendly neighbour’ of Sri Lanka and a ‘major shareholder’ of the IMF. It said that China has always been encouraging the IMF and other international financial institutions to continue to play a positive role in supporting Sri Lanka’s response to its current difficulties and its efforts to ease debt burden and realise sustainable development.



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COPE discovers fake documents covering drug imports in 2022/23

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The Parliamentary watchdog Committee on Public Enterprises (COPE) has found that there were fake documents regarding the importing of medicines under the emergency procurement system in 2022 and 2023.

This was revealed during a COPE meeting held at Parliament probing the transactions of the National Medicine Regulatory Authority (NMRA).

NMRA CEO Saveen Semage told the committee that several fake documents have been found due to the lack of registration of medicines.

Stating that six such fake documents were found last year alone, Semage said he had recorded statements regarding each of the documents with the Financial Crimes Investigation Division.

He revealed that, however, no investigations have been conducted yet into the incidents.

“We have documents with confessions from a woman accepting that fake documents had been made. However, a statement has not even been recorded from that woman yet,” he said.

Meanwhile, COPE member MP Asitha Niroshana Egoda Vithana also revealed that the highest number of waive-off registrations (WOR) for medicines had been obtained in 2022 and 2023.

He said 656 such WORs had been obtained in 2022 and 261 in 2023, adding that this proves that discrepancies have taken place during the emergency procurement of medicines during these periods.

Furthermore, Deputy Director General of the Medical Supplies Division of the Health Ministry, Dr. G. Wijesuriya said discussions are underway on allowing the State Pharmaceutical Corporation (SPC) to directly import essential medicines.He pointed out that it was essential to take a policy decision in this regard as a solution to mitigate such discrepancies.

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Batalanda report tabled in parliament, forwarded to AG

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Bimal Ratnayake

The Batalanda Commission report was tabled in Parliament on Friday by the Leader of the House and Transport Minister, Bimal Ratnayake.

Minister Ratnayake announced that the government has decided to forward the report to the Attorney General for legal advice. Additionally, a Presidential Committee will be appointed to provide guidance and recommendations on how to proceed with the findings of the report.

Ratnayake said that the Cabinet of Ministers, along with President Anura Kumara Dissanayake, has made a policy decision to take necessary action in response to the report. He reassured the public that steps are being taken to ensure that such a dark chapter in the country’s history is never repeated.

Minister Ratnayake said that a two-day debate on the Batalanda Commission report will be scheduled in Parliament at an appropriate time, allowing for a detailed discussion on the report’s findings and recommendations.

The report, which will be printed in all three official languages—Sinhala, Tamil, and English—will be made available to the public in the near future. Ratnayake confirmed that printed copies would be provided to members of Parliament as well as the general public for their review.

The Leader of the House further revealed that there are 28 evidence volumes associated with the commission’s work, which will be submitted to Parliament at a later date for further scrutiny.

Ratnayake said that as entire country concerned of the Batalanda Commission’s findings, the government’s commitment to addressing the issues raised and preventing future atrocities stands clear. The next steps, including legal action and policy recommendations, will be shaped by expert advice and informed parliamentary discussions, he said.

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CB Governor stresses need to assist crisis-hit construction industry

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Governor of the Central Bank Dr. Nandalal Weerasinghe on Friday (14) emphasized the importance of promoting a sustainable and cost-effective construction industry in the country, highlighting key challenges and opportunities in the sector.

Speaking at ‘Construction Expo 2025’, Dr. Weerasinghe underscored the need for Sri Lanka to align with global trends in sustainable construction, integrating cost-effective energy solutions and eco-friendly building practices.

“I must say my views here are not necessarily as Governor of the Central Bank of Sri Lanka, but as a person looking at this construction industry and how this can be developed and what the issues are. Sustainability in construction is essential, not just for new projects but also for existing buildings,” he noted.

Dr. Weerasinghe acknowledged that the construction sector has been one of the hardest-hit industries due to multiple economic pressures in recent years including the decline in public investments, high material costs and the industry being dependent on government projects.

The CBSL Governor, who acknowledged that the government faced fiscal constraints, limiting infrastructure spending and delaying payments to contractors, said that however, the outstanding arrears had now been settled.

“Government did not have space to spend money for public investment, especially construction that had a significant impact on the industry in the last couple of years, plus the government inability to pay the arrears for a long period. That was an issue we all recognize that has been one of the adverse impacts the industry had in the past”, he expressed.

“Also the cost of materials went up significantly, partly because of foreign exchange shortages. As a result, the shortage had shot up the prices of construction materials, as well as depreciation of the currency, high interest rates, finance costs, and other factors. We all recognize that it had an adverse impact on the industry. It’s one of the worst affected industries because of all these factors.”

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